The crime of illegally organizing and leading pyramid selling activities refers to asking participants to obtain the qualification to join in the name of selling goods or providing services. Moreover, a hierarchy is formed in a certain order, and the number of developers is directly or indirectly used as the basis for rewards or rebates, which induces and coerces participants to continue to develop pyramid schemes involving others, defrauding property and disrupting economic and social order. In terms of constitutive requirements, the crime of illegal organization leading pyramid selling activities must meet the following conditions at the same time, that is, the participants are required to obtain the qualification to join by paying fees or purchasing goods and services, and form a hierarchy in a certain order, with the number of people developed as the basis for reward or rebate directly or indirectly, to induce and coerce participants to continue to develop others' participation and defraud property. In the final analysis, the crime of organizing and leading pyramid selling activities is a special fraud of "defrauding property", which means that the crime takes "developing people's heads" as the main profit mode instead of commodity sales, which is a fraud rather than a normal business behavior.
Legal objectivity:
The object of this crime is a complex object, which not only infringes on citizens' property ownership, but also infringes on the market economic order and social management order. The object of this crime is citizens' personal property, usually money. MLM is often accompanied by tax evasion and price gouging, which infringes on many social relations and legal objects. Objectively, this crime is manifested as a serious act of organizing and engaging in pyramid selling activities in violation of state regulations and disrupting market order. However, not all pyramid schemes constitute a crime. If the circumstances are general, it is a general illegal act, and the administrative department for industry and commerce will give administrative punishment. Only if the perpetrator's pyramid scheme is serious will it constitute a crime, and criminal responsibility shall be investigated according to law. In addition, it is necessary to distinguish between pyramid selling crimes and illegal acts in direct selling activities. If there are deceptive and misleading behaviors in direct selling, such as exaggerating the income of direct sellers and the efficacy of products, the direct selling supervision department should impose administrative penalties and should not be considered as pyramid selling crimes. If the circumstances are serious, we should comprehensively weigh the amount involved in pyramid selling, the number of pyramid selling developers, the means used in pyramid selling, the impact caused by pyramid selling and other factors. Subject elements The subject of this crime is the general subject, and any natural person who has reached the legal age of criminal responsibility and has the ability of criminal responsibility can constitute this crime. This crime is mainly aimed at the organizers of pyramid schemes and the active participants who have repeatedly introduced, deceived and coerced others to join pyramid schemes. For the general participants, they will not be investigated. According to Article 2 of the Supreme People's Court's June 1999 Interpretation on Relevant Issues Concerning the Specific Application of Law in the Trial of Unit Crimes, "companies, enterprises and institutions established by individuals for illegal and criminal activities commit crimes, or after the establishment of companies, enterprises and institutions, the main activity is to commit crimes." Therefore, according to the provisions of judicial interpretation, companies specializing in pyramid selling activities are not treated as unit crimes, and their organizers and main participants are convicted and punished as natural persons. Subjective Elements Subjectively, this crime shows direct intention and has the purpose of illegal profit. That is to say, the perpetrator knows that he is carrying out pyramid selling activities, which is prohibited by national laws and regulations, but in order to achieve the purpose of illegal profit, he still carries out this kind of behavior, and has hope for the harmful results and actively pursues it.