Article 224 of the Criminal Law: Organizations and leaders, in the name of business activities such as selling goods and providing services, require participants to pay fees or purchase goods and services to qualify for joining the company, and in a certain order to form a hierarchical structure, and directly or indirectly develop the number of people as the basis for remuneration or rebates to induce and coerce participants to continue to develop others to participate in the company, and to deceive and obtain property, disturb the economic and social order, and to make a profit. Property, disturbing the economic and social order of the marketing activities.
Article 7 of the Regulations on the Prohibition of Pyramid Schemes, the following acts are pyramid schemes:
(1) The organizer or operator, through the development of people, requires the people to be developed to develop other people to join the development of the people on the basis of the number of people developed by the development of people directly or indirectly rolling development of the number of calculation and payment of rewards (including material incentives and other economic benefits, the same hereinafter), and to make illegal profits.
(2) The organizer or operator, through the development of personnel, requires the developed personnel to pay fees or pay fees in the form of subscription of commodities, etc., in order to obtain the qualification of joining or developing other personnel to join, and to profit illegally;
(3) The organizer or operator, through the development of personnel, requires the developed personnel to develop other personnel to join, and to form up and down line relationships, and to calculate the remuneration (including material incentives and other financial benefits, hereinafter the same) based on the sales performance of the down line. (C) the organizer or operator, through the development of people, requiring the development of other people to join, forming a relationship between the upper and lower lines, and calculating and paying remuneration to the upper line on the basis of the sales performance of the lower line, and profiting from illegal profits.
In the "Regulations on the Prohibition of Distribution", repeatedly referred to the concept of hierarchical relationships, a certain law to form hierarchical relationships is only a phenomenon in many pyramid schemes, which must be associated with the illegal appropriation of other people's property may be suspected of pyramid schemes.