Pyramid Scheme Act In Utah
Pyramid scheme is defined as any sales device or plan in which a person gives consideration to another person in exchange for compensation or the right to receive compensation, which is primarily derived from introducing other people into the sales device or plan, rather than from the sale of goods, services, or other property.
According to Chapter 6a of Title 76 of the Utah Code, a person may not organize, establish, or administer a pyramid scheme. This is a violation of Section 13-11-4 of the Utah Consumer Sales Practices Act and is considered a 3rd degree felony offense. However, a person who participates in the pyramid scheme by only receiving compensation for introducing other people to the pyramid scheme, rather than for the sale of goods, services, or other property, is guilty of a class B misdemeanor.
Civil violations of Utah’s Pyramid scheme act are investigated and prosecuted as defined in Section 13-11-4 by the appropriate county or district attorney.
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