ProfHenryHiggins wrote:The legal definition of a pyramid scheme makes no mention or requirement of anyone being at the top, Val.
I'll let wserra explain the three things that legally define a pyramid in your country, since he is a lawyer, but I can remind you that waving the charity and good deeds issue around is a red herring. The two are not connected in the eyes of the law, and the practice of naming charities and wholesome causes as a way to keep eyes away from the money flow is a common one with pyramid schemes.
Every word correct. Sorry about the delay - I've been on trial for the last week and had no time to post. Here's the short version.
The classic U.S. definition of a pyramid scheme comes from the FTC.
In re Koscot Interplanetary, Inc., 86 F.T.C. 1106 (1975), aff'd sub nom.
Turner v. F.T.C., 580 F.2d 701 (D.C.Cir. 1978). According to the FTC, an "entrepreneurial chain" pyramid scheme is "characterized by the payment by participants of money to the company in return for which they receive (1) the right to sell a product and (2) the right to receive in return for recruiting other participants into the program rewards which are unrelated to sale of the product to ultimate users". The courts have universally adopted the principles of
Koscot.
You don't get past (1). You have no product, not even one maintained only for appearances. The only "product" you guys sell is membership in the pyramid. The only source of money are the participants themselves. If you do not recruit, you have no income. This is why pyramids don't get much clearer than gifting schemes.
Your only conceivable defense is that your members understand that there is no guarantee of receiving anything. That may be true (or may not - I have no way of knowing what your recruits are actually told, as opposed to what appears on the web site. Nudge, nudge, wink, wink). Whatever they are told, though, it is perfectly clear that they expect to receive, and not just to give. HH has been posting example after example of how you guys really recruit. You say exactly what every other pyramid says - those are rogue distributors. "Rogue" loses its meaning when it applies to most.
I have a way for you to validate your arguments. For a few months, get rid of the Gifting, er,
Giving Pool. The only way a member gets anything is by posting a hardship story and receiving true gifts
from individual members. No airplane, er,
cycles, no moving up, down, in, out, splitting - whatever. None of that. No gifts by the organization to anything except recognized 501(c)(3) charities. Know why you're not going to do that? Because no one would join, no more money, Ulrich and Lambert out of jobs. After all, you can keep writing about how "our Creator designed the Earth with abundance for all". You can keep "eliminating scarcity in the world". You just can't give to individuals. Why would no one join, with all your wonderful motives still in place? Because the reason for joining is the expectation of receiving. That's a gifting scheme. I think you know this.
BTW, why do you ignore perfectly legitimate questions? Here, I'll try again:
Why don't you post one official response you guys received from one AG? Just one.
Speaking of courts, Ulrich has been posting for the better part of a year how he sought a declaratory judgment as to CUA's legality. How's that going? Court? Docket number?
[Silence.]
