Pyramid Scheme and Multi-Level Marketing

When people learn of a business that encourages recruiting they often assume it to be a pyramid scheme, when in fact it may just be another multi-level marketing company. While both may give incentives to their reps for recruiting others, one is illegal while the other is simply frowned upon by those not trusting of “get rich quick” ventures.

Pyramid Scheme Act

Photo by: Stephen Day

Photo by: Stephen Day

Utah’s Pyramid Scheme Act defines a pyramid scheme as “any sales device or plan under which a person gives consideration to another person in exchange for compensation or the right to receive compensation which is derived primarily from the introduction of other persons into the sales device or plan rather than from the sale of goods, services, or other property.” Anytime the recruiting is the only reason or main purpose of the business, versus selling products or services, charges for violation of the Pyramid Scheme Act may result.

Multi-level Marketing

Photo by: That Hartford Guy

Photo by: That Hartford Guy

Multi-marketing businesses, otherwise known as direct-sales or network marketing, suffer from the bad reputation of pyramid schemes as they have similar business approaches. Multi-level marketing mimics a pyramid scheme model since the business thrives when recruits are encouraged to sign on. Those recruits can recruit others and so on. Those individuals who are higher up the recruiting ladder earn money from those on lower levels. This may sound exactly like a pyramid scheme, however the money that those in multi-marketing businesses make isn’t made strictly by recruiting; there is actually a product to be sold. In fact, most of the income is made from the sale of products or service. Certainly, those at the top earn more money in the long run than those who are newly recruited, but the business plan is appropriate and legal.

Trouble for genuine businesses

Photo by: Ben Helps

Photo by: Ben Helps

Multi-level marketing is usually done from home, online, or door to door sales. Unfortunately, because multi-level marketing representatives don’t have a specific business location or warehouse where products are stored, it may be harder to prove that their business has a product to sell. Not having the product on hand can make it difficult to prove that it is an authentic business, versus a pyramid scheme. This is especially difficult for businesses that are just starting out, and may not have thought out their product thoroughly. Many play it safe by hopping on the bandwagon of some of the major well-known multi-level marketing companies such as:

• Avon
• Mary Kay
• Scentsy
• Melaleuca
• Herbalife
• Amway
• The Pampered Chef
• doTerra
• Synergy

Others with an entrepreneur spirit choose to create their own business or go with companies that are just getting started. This is where many run a risk of facing pyramid scheme charges.

Penalties for running a pyramid scheme

According to Utah Code 76-6a-4 or the Pyramid Scheme Act, “Any person who knowingly organizes, establishes, promotes, or administers a pyramid scheme is guilty of a third degree felony.” Persons charged with a 3rd degree felony may face up to 5 years in prison and a fine of up to $5,000.

Jail time just for participating

Photo by: my_southborough

Photo by: my_southborough

Time behind bars isn’t only for those who are the masterminds of the pyramid schemes. Up to six months in jail can result from a person who merely joins the illegal business model. This is also discussed in Utah Code 76-6a-4. “Any person who participates in a pyramid scheme only by receiving compensation for the introduction of other persons into the pyramid scheme rather than from the sale of goods, services, or other property is guilty of a class B misdemeanor.” When creating or joining a multi-level marketing company, make certain that the company is doing everything possible to avoid pyramid scheme charges. For individuals who planned a business before considering the product, or for those who got caught up in a scheme that turned out to be illegal, contact a criminal defense attorney.

Aggravated Robbery Suspect Robbed Same Pharmacy Once Before

aggravated robbery suspect robbed same pharmacy

Photo: DWT110/Wikimedia Commons

On Wednesday, March 18, a La Verkin man who was arrested following the March 11 robbery of a Hurricane pharmacy was charged with more than just aggravated robbery for that incident. He was also given additional charges for a previous robbery at the same location almost a year earlier to the date.

Don’t Return to the Scene of the Crime, Especially not to Rob it Again

According to an article in KSL News, just before noon on March 11, Jonathan S. Forest, 37, entered the Hurricane Family Pharmacy, displayed what was later discovered to be an airsoft gun, and made demands for prescription medication.

A witness to the robbery followed Forest after he left the pharmacy. A call to 911 resulted in an arrest of Forest within 6 minutes of the robbery. Forest had the prescription medication and black airsoft gun on his possession. This led to the original charge of aggravated robbery.

However, between his arrest and conviction on March 18, officers were able to link Forest to another robbery of the same pharmacy on March 31, 2014. After obtaining a search warrant for Forest’s place of residence, detectives located evidence “consistent with the first robbery.”

As a result of these new discoveries, Forest was charged with aggravated robbery, aggravated assault, and nine counts of possession of a controlled substance.

Airsoft Guns Still Result in Aggravated Robbery

According to the Utah Criminal Code 76-6-302 as it applies to this story, aggravated robbery is defined as the act of someone carrying out a robbery and in the process, using or threatening to use “a dangerous weapon as defined 76-1-601.” In that article of the Utah Criminal Code, a dangerous weapon is defined as “any item capable of causing death or serious bodily injury.”

While some may question whether an airsoft gun could cause “serious bodily injury,” the article goes on to define a dangerous weapon as “a facsimile or representation of the item, if…the actor’s use or apparent intended use of the item leads the victim to reasonably believe the item is likely to cause death or serious bodily injury; or the actor represents to the victim verbally or in any other manner that he is control of such an item.”

Aggravated robbery is considered a first degree felony, punishable by anywhere from five years to life in prison and a fine of up to $10,000. If you know someone who has been charged with aggravated robbery, don’t leave that wide interpretation of punishment in the hands of a public defender. Contact an experienced criminal defense attorney.

Open Container One of Charges for Man who Head-butts Patrol Car

open container for head-butting man

Photo: SimplyElke

A man was arrested in Davis County on Wednesday, March 11, after allegedly smashing a window in a patrol car with his head and threatening law enforcement, among other things. While the man received a laundry list of potential charges which aren’t as common—both felonies and misdemeanors—the charge of having an open container in the vehicle is one that occurs a little more frequently.

A Perfect Example of “Disorderly Conduct”

According to a report in KSL News, at approximately 10:30 p.m. on Wednesday night, a Clinton patrol officer stopped Randy Duane Ochsner, 54, and was soon assisted by a Davis County Sheriff’s Office deputy. Believing Ochsner to be driving impaired—but not yet having discovered the open container… or other things in the vehicle which would get Ochsner in trouble—a field sobriety test was conducted during which Ochsner became agitated. After being cuffed against the passenger side of the patrol car, things just got worse.

According to Sgt. DeeAnn Servey, “He became very upset and decided to bash his forehead into the passenger rear window of the Davis County Sheriff’s patrol car, which led to the window completely shattering and several injuries to his face.”

When medical personnel responded, Ochsner was still reportedly belligerent, attempting to kick one of the EMTs and spit on both health care workers and responding officers, the latter of which landed him a “propelling a bodily substance” assault charge.

In addition, while traveling to a local hospital, Ochsner allegedly threatened to shoot one of the deputies in the head. After treatment for his injuries, Ochsner was transported to the David County Jail. A search of his vehicle turned up drug paraphernalia and controlled substances, which lead to possession charges for both.

In addition to those charges and propelling a bodily substance, Ochsner was arrested on suspicion of assaulting an officer, interference with an arresting officer, making terroristic threats, criminal mischief, failure to install an ignition interlock device, being an alcohol restricted driver, driving under the influence with two or more prior convictions within 10 years, and having an open container in the vehicle.

Understanding the Open Container Law

While the least serious of Ochsner’s charges, having an open container is a charge many people come face-to-face with, sometimes simply for not understanding the law. According to 41-6a-526 of the Utah Motor Vehicles Traffic Code, “a person may not drink any alcoholic beverage while operating a motor vehicle or while a passenger in a motor vehicle, whether the vehicle is moving, stopped, or parked on any highway or waters of the state.”

This section of the open container code also states that a person may not have a container with a seal that has been broken or contents partially consumed in the passenger compartment, including a utility of glove compartment, even if they aren’t driving impaired.

Exceptions for both the drinking and possession of an open container are made for passengers in the living quarters of a motor home or camper, a limousine or chartered bus, or in a motorboat. While drinking in a taxicab or bus is still prohibited, possession of an open container in those vehicles is legal.

Breaking this section of the traffic code is a class C misdemeanor, punishable by up to 90 days in jail and a $750 fine. Even though class C is the least serious of the misdemeanors, it’s still not something to gamble with. If you or someone you know has been charged with being in possession of an open container, contact an experienced criminal defense attorney.