No. CS/HB 265
Filed under Criminal Justice.
Prohibition of Pyramid Promotional Schemes; Prohibits person from establishing, promoting, operating, or participating in pyramid promotional scheme; provides penalties; provides for restitution; provides that specified provisions & penalties are in addition to civil, administrative, or criminal actions provided by law
Plain English Summary
AI-GENERATEDThe bill replaces the old pyramid sales scheme law with a new statute that explicitly prohibits establishing, promoting, operating, or participating in pyramid promotional schemes.
It defines a pyramid promotional scheme as a plan where compensation is primarily based on recruiting others rather than the sale and consumption of products or services.
Violators face criminal penalties, including a third-degree felony for organizers and a first-degree misdemeanor for participants, along with mandatory court-ordered restitution.
The law includes specific exceptions for legitimate direct sales plans that allow independent salespersons to repurchase unsold inventory under commercially reasonable terms.
AICreates a new criminal offense prohibiting any person from establishing, promoting, operating, or participating in a pyramid promotional scheme.
AIDefines a pyramid promotional scheme as a plan where compensation is primarily based on recruiting others rather than the sale and consumption of products, goods, services, or intangible property.
AIRequires courts to order restitution for property loss, including investigation and prosecution expenses, and the disgorgement of any profits realized by the convicted person.
AIExempts plans where compensation is based on product sales for personal use or resale, provided they do not require excessive inventory purchases and offer a repurchase program for current, marketable inventory.
AIDeletes the existing statutory definition of a pyramid sales scheme and its associated first-degree misdemeanor penalty from the chain letters statute.