EXPOSE: MLM CRITICS LIES - AS THEY TACKLE THE WATCHDOGS!!!
www.mlmsurvivor, run by Ruth Carter website registered to Sue Perkins
Jon Taylor Phd, Robert Fitzpatick
MARYLAND
FRAUD - PYRAMID PROMOTIONAL SCHEMES & MLM LAW
Sections 14-301, 14-302, 14-303 Md. Ann. Code
233D. Pyramid promotional schemes.
(a)Definitions - In this section, the following words have the meaning indicated.
(1) “Compensation” includes payment based on a sale or distribution made to a person who is either a participant in a plan or operation or who, upon making payment, then has the right to become a participant.
(2) “Consideration” does not include:
(I) Payment for purchase of goods or services furnished at cost for use in making sales to persons who are not participants in the scheme and who are not purchasing in order to participate in the scheme;
(ii) Time or effort spent in pursuit of sales or recruiting activities; or
(iii) The right to receive a discount or rebate based on the purchase or acquisition of goods or services by a bona fide cooperative buying group or association.
(3) “Promote” means to induce one or more other persons to become a participant.
(4) “Pyramid promotional scheme” means any plan or operation by which a participant gives consideration for the opportunity to receive compensation to be derived primarily from any person’s introduction of other persons into participation in the plan or operation rather than from the sale of goods, services, or other intangible property by the participant or other persons introduced into the plan or operation.
(b) Prohibited acts. - A person may not establish, operate, advertise, or promote a pyramid promotional scheme.
(c) Penalties. - A person who violates the provisions of this section is guilty of a misdemeanor and on conviction is subject to a fine of not more than $10,000 or imprisonment for not more than 1 year or both.
(d) Certain defenses not available. It is not a defense to a prosecution under this section that:
(1) The plan or operation limits the number of persons who may participate or limits the eligibility of participants; or
(2) On payment of anything of value by a participant, the participant obtains any other property in addition to the right to receive compensation.
14-301. “Multilevel distribution company” defined. (Maryland Cont.)
In this subtitle, “multilevel distribution company” means a person who, for consideration, distributes goods or services through independent agents, contractors, or distributing at different levels of distribution which rates of pricing or discounting that differ from 1 level to another.
14-302 Repurchases required.
(a) In general. A multilevel distribution company may not require a participant in its marketing program to buy goods or services or pay any other consideration to participate in the marketing program unless the multilevel distribution company agrees to repurchase the goods:
(1) that are in resaleable condition; and
(2) that the participant has been unable to sell 3 months after receipt of the goods first ordered.
(b) Contracts of participation. A multilevel distribution company shall state in writing in each contract of participation in its marketing program that:
(1) a participant may cancel the contract for any reason with 3 months after the date of receipt of goods or services first ordered by written notice to the multilevel distribution company; and
(2) on cancellation, the multilevel distribution company shall repurchase the goods.
(c) Repurchase price. The repurchase price shall be at least 90% of the original price paid by the participant.
14-303 Representations of earnings.
A multilevel distribution company may not represent directly or indirectly that participants in its marketing program may or will earn a stated gross or net amount or represent in any way the past earnings of participants unless the stated gross amount, net amount, or past earnings:
(1) are those of substantial number of participants in the community or geographic area where the representation is made; and
(2) accurately reflect the average earnings of participants under circumstances similar to those of the participant or prospective participant to whom the representation is made.
Attorney General, Securities Division, 200 St. Paul Place, 20th fl. Baltimore, MD 21202 Phone: 410-576-6360
Multilevel Distribution Company Maryland law
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