Recently, a cross-provincial pyramid scheme case undertaken by King&Capital Law Firm lawyers Xiao Shuwei and Peng Jiyue achieved significant results after more than a year of full defense. The parties were first released on bail pending trial, a few months after the local investigating authorities on the case withdrawn the case, the case successfully realized the effect of the defense of innocence.
First, the father and son agent of medical health care products suspected of pyramid schemes, both were filed
for investigation in
this case, the parties are a father and son, they are a senior agent of a medical health care products. The health care products focus on relieving all kinds of “pain”, its sales network covering Hebei, Tianjin, Shandong and other provinces. Health care products and cosmetics, has been the high incidence of pyramid schemes. This is because the pricing standard of these products is not clear enough, the effect is also the lack of effective means of measurement, so it is easy to be recognized by the judicial authorities as no real value of the “props commodities”.
After the father and son were filed, Shandong police carried out off-site arrests, and escorted one of the parties to Shandong. The family was in a state of extreme anxiety. It is rumored that the initial filing of the crime of fraud, according to the millions of dollars involved, the person concerned will face more than ten years of imprisonment. Coupled with the news of the arrest of agents in other cities, the family felt as if an invisible net was falling from the sky. At the time of panic and helplessness, the client entrusted a lawyer from King&Capital Law Firm to defend him, which made him feel a little bit relieved.
Second, the lawyer accurate intervention, 30 days after the detention of successful bail pending trial, until the case is withdrawn
at the investigation stage there is a serious mismatch of information. On the one hand, the person concerned lacks legal knowledge, it is difficult to make accurate judgment on his own behavior; on the other hand, based on the confidentiality requirements, the investigating authorities will not disclose too much information about the case. Moreover, the investigative work determines the subsequent direction of the case to a large extent, and is of key significance in terms of foundation and direction. Therefore, it is particularly important to obtain professional legal assistance during the investigation stage.
After accepting the commission, the defense lawyers discussed the sales system of the products in depth with the family members of the clients, and personally viewed and experienced the goods involved in the case. After a careful analysis of the details of the case, the defense lawyer's preliminary judgment, the case is suspected of fraud is less likely, at most suspected of pyramid scheme crime, and the statutory penalty for fraud is significantly heavier than pyramid scheme crime.
After determining the preliminary direction of the case, the defense further determined that the case is at most suspected of administrative violations and does not yet constitute a crime. Through repeated meetings with the parties to verify the details of the case, while repeatedly communicating with the police handling the case, and timely application for bail pending trial. In the detention of 30 days period, the investigating authorities finally agreed to release the person on bail pending trial. It is important to know that before this, the same suspect has been arrested, so this result is not easy.
The release on bail pending trial only meant that the client did not need to be detained in the detention center for the time being, but it did not mean that he was not convicted of the crime. The defense lawyers continued to communicate closely with the investigating authorities and strengthened their defense opinions. In the end, the investigating authorities formally dismissed the case a few months later.
Third, the reminder and advice on pyramid schemes crime
in recent years, pyramid schemes crime is a high trend. Jack Ma has said that the more developed the economy, the lower the commercial profits, so many flexible people think: instead of earning money on goods, it is better to earn money on business models. Therefore, how to expand the market and increase profits with the help of business model has become a problem for many people to delve into, however, they have created a wide variety of business models, many of which have fallen into the trap of pyramid schemes. The defense team has undertaken a number of major criminal cases of pyramid schemes, and would like to make the following tips for you:
1. The core standard for judging pyramid schemes: the key to determining whether a pyramid scheme constitutes a pyramid scheme lies in determining whether the source of profit is the value of the product or the “membership fee” obtained from the continuous development of the head. In a legitimate business model, profits ultimately come from the goods themselves. If a business model in which the profit of the goods is extremely low, but relies on the continuous development of members, agents (or other similar designation), through the collection of their payment of various fees to maintain the operation of the system, then the probability of this situation constitutes a pyramid scheme.
2. The legal definition of pyramid schemes: pyramid schemes cover two levels of administrative violations and criminal offenses. Administrative offense level of pyramid schemes, the essence of the sale of goods, just by pulling the head of the way to build a sales system, the effect of “people to people”, greatly disrupting the social order, and therefore will be subject to administrative penalties; criminal level of pyramid schemes, the essence of the sale of goods is no longer the so-called commodities are just valueless. “prop goods”, the organization and leader of pyramid selling activities is to cheat the participants to pay the membership fee or head fee, so the essence of pyramid selling crime is fraud. Does not have the nature of fraud pyramid scheme (i.e., team remuneration) only belongs to the administrative law, does not constitute a crime.
3. Definition of the main body of the crime: the crime of organizing and leading pyramid schemes, as can be seen from the name, only punishes the organizers and leaders, and ordinary participants (e.g., those who have only purchased pyramid scheme products or developed a small number of downlines) do not constitute this crime.
4. Disputes over the characterization of crimes: The characterization of activities related to pyramid schemes is often controversial, often involving different crimes such as pyramid schemes, fraud, and illegal business operation, etc. The differences in sentencing and disposition of property involved in different crimes are huge, with far-reaching impacts on the personal interests of the suspects and defendants, which must be given sufficient attention.
5. Responding to foreign law enforcement: pyramid schemes usually involve different geographical areas, the phenomenon of foreign law enforcement is more common, and may even appear in the “ocean fishing” situation. In the face of police investigations in other places, while actively cooperating, we must pay attention to verify the identity of the other party and check whether there is any local police investigation, so as to prevent the infringement of their legitimate rights and interests.
