Viewpoint... The exploration of the difference between the crime of organizing and leading pyramid selling activities and the crime of fraud in the practice of criminal defense.

The similarity in the structure of the two crimes and the difference in the punishment means that it is of great significance to outline the boundaries for the two crimes; in criminal defense, in case of special cases, it is also possible to consider the crime of organizing and leading pyramid selling activities as a misdemeanor defense for the crime of fraud. The author intends to combine the undertaking of a real case, a detailed analysis of the similarities and differences between the two crimes. The procuratorial organ in this case prosecuted for the crime of fraud, involving more than 0.7 billion yuan. According to Shandong's current sentencing standards, if it is found to be a crime of fraud, it is very likely to be sentenced to life imprisonment. However, if the judge can be persuaded with sufficient reasons to change the crime involved in the case to the crime of organizing and leading pyramid selling activities, there is great hope to strive for a more lenient result for the defendant.

The law on the crime of organizing and leading pyramid selling activities (hereinafter referred to as pyramid selling crime) clearly stipulates that only if it has the elements of "defrauding property" can it constitute the crime. From this, the crime of pyramid selling is the same as the crime of fraud, both of which take "cheating" as its core. If the crime of pyramid selling wants to induce the victim to pay money voluntarily, it will inevitably have the characteristics of deception. If the victim clearly knows that MLM itself does not create any economic value, and can only continue to defraud the offline payment in the form of "drumming and spreading flowers" and "demolishing the east wall to make up the west wall", then the victim cannot participate in MLM activities. in. If the organizers and leaders of MLM activities want to expand the scale of members and induce more victims to participate in MLM activities, they must adopt deceptive methods of fabricating facts and concealing the truth to cover up the true face of the "Ponzi scheme" of MLM activities. And as far as possible to make the victims have the wrong understanding of "legal", "stable" and "quick money", so that the victims voluntarily pay money to participate in MLM based on this wrong understanding. In this sense, pyramid selling crime is essentially a large-scale fraud crime.

The crime of fraud is located in the crime of property infringement in Chapter 5 of the Criminal Law, while the crime of organizing and leading pyramid selling activities is located in the crime of undermining the order of the socialist market economy in Chapter 3 of the Criminal Law. According to the basic principle of system interpretation, each crime listed in a specific chapter should be bound by the purpose of the chapter, and the purpose of the chapter is the same. As far as the protection law is concerned, the protection law of fraud shall be the property of the individual citizen. The crime of organizing and leading pyramid selling activities not only protects the personal property of citizens, but also protects the social and economic order.

In addition, from the perspective of the interpretation of the text, the law on the crime of organizing and leading pyramid selling activities also clearly states that "defrauding property and disturbing economic and social order" constitutes the crime of organizing and leading pyramid selling activities, indicating that disturbing economic and social order is also a key element to measure crime and non-crime. From the perspective of both the interpretation of the text and the system, the economic and social order can be included in the protection of pyramid selling crimes.

It is precisely because the crime of pyramid selling protects citizens' property and economic and social order at the same time that its sentencing standard is different from the crime of fraud in the chapter of crimes against property. The crime of fraud only takes the amount of fraud as its main criterion for sentencing. However, pyramid selling crimes not only consider the amount of funds absorbed, but also consider the number of victims based on the consideration of maintaining social order.

Considering from the objective behavior, the deception methods of pyramid selling crime and fraud crime are still different.

Fraud crimes are often targeted at specific individuals and are carried out in the form of "one-on-one" private exchanges. The crime of pyramid selling is often carried out in the form of public publicity, advertising, sales promotion and so on, "one to many" facing the unspecified majority of people in the society. This point is also a concrete manifestation of the heterogeneity of protection law interests in terms of objective behavior. It is precisely because the crime of pyramid selling has the characteristics of openness and non-specificity that its legal interests inevitably include the social and economic order.

The crime of fraud is often committed by the perpetrator himself, and the victim of the crime of fraud is defrauded one by one. The victims of pyramid selling crimes are often thousands or even tens of thousands of people. It is obvious that the criminals themselves cannot personally participate in every deception. In fact, most of the deceptive acts in pyramid selling crimes are often committed without criminal intent by the victims who believe that they are committed in order to obtain commissions for the development of the offline, by displaying posters in the circle of friends and giving oral publicity to relatives and friends.

The pattern of deception in pyramid schemes is fixed. According to the "Opinions on Several Issues Concerning the Application of Laws in Handling Criminal Cases of Organizing and Leading MLM Activities" issued by the First Department of the Two Highs, which is specially aimed at MLM crimes, it makes detailed provisions on the specific patterns of deceptive behaviors of MLM crimes, "adopting fabricating and distorting national policies, fabricating and exaggerating business, investment, service items and profit prospects, concealing the true source of remuneration, rebate or other fraudulent means, it constitutes the crime of organizing and leading pyramid schemes to" defraud property ". In a nutshell, the "deception" of pyramid selling crime refers to "fabricating national policies and profit prospects and concealing the true source of profits".

Subdivided types, pyramid selling crime generally has three characteristics: 1. "pull the head", that is, the development of personnel to develop other personnel to join, the development of personnel to their direct or indirect rolling development of the number of personnel based on the calculation and payment of remuneration. 2. "Charging an entry fee", that is, the organizer or operator, through the development of personnel, requires the developed personnel to pay fees or pay fees in disguised form by subscribing for goods, etc., to obtain the qualification to join or develop other personnel to join, so as to seek illegal benefits. 3. "With distinct hierarchy", that is, the registration of members within the MLM organization presents a hierarchical pyramid structure.

In fact, the three characteristics of MLM activities are organically combined, and any point is difficult to separate from other characteristics. Only by charging an entry fee, MLM can rebate to participants on the basis of not producing any actual goods, and use it as bait to develop offline. Only by taking the number of lines as the standard to calculate remuneration and encourage the development of offline can more entry fees be charged to maintain MLM activities. It is also in the process of developing offline and calculating remuneration that MLM organizations continue to grow and join members in an exponential growth, which gradually forms a pyramid-like hierarchical structure. Therefore, only those who use this relatively fixed means to absorb unspecified members of the society, and deceive and conceal by fabricating relatively fixed lies, constitute pyramid selling crimes.

But the crime of fraud, its means of deception more diverse, fictitious facts more diverse. Not limited to the above-mentioned examples, as long as it is sufficient to cause the general public to have a misunderstanding and dispose of property based on the misunderstanding, it constitutes a crime of fraud.

Finally, in practice, a key distinction between pyramid selling crimes and fraud crimes is that all victims of fraud crimes will suffer property losses, while pyramid selling crimes, because of their fixed mode of rewarding downlines, join in the early stage of pyramid selling activities, relatively large downlines, not only will not suffer losses, but often can even make profits. The author communicated with a number of judges and prosecutors who undertook pyramid selling crime cases, and found that in judicial practice, whether there is profit among the victims is often an important reference for judging whether the offender belongs to pyramid selling crime.

The above-mentioned four distinctions between pyramid selling crimes and fraud crimes, especially the latter two distinctions, are precisely the fundamental reason why the sentencing of pyramid selling crimes is lighter than that of fraud crimes. From the perspective of criminal behavior, a large number of deceptive acts in pyramid selling crimes are not carried out by the pyramid selling organizers themselves, but by the victims who believe that they are committed without criminal intention, and their criminal responsibility should not be entirely attributed to the pyramid selling organizers. From the perspective of crime results, not all victims of pyramid selling crimes may have suffered property losses, and some victims may still have profits. Therefore, the factor of real property loss must also be taken into account when measuring criminal responsibility. To sum up, the penalty for pyramid selling crimes is significantly lower than that for fraud crimes.

As we all know, the crime of fraud is for the purpose of illegal possession. But is the crime of pyramid schemes also aimed at illegal possession? The author holds a negative opinion here. From a positive analysis, in the "Regulations on Prohibition of MLM" promulgated by the State Council in 2005, the three pyramid schemes listed in Article 7 all use "seeking illegal benefits" as their constituent elements. "Illegal profit-making" shall be the criminal purpose of the crime of organizing and leading pyramid selling activities. From the negative analysis, according to the first paragraph of Article 6 of the opinions on Several Issues concerning the application of law in handling criminal cases of organizing and leading pyramid selling activities issued by the two high schools, "organizing and leading pyramid selling activities for the purpose of illegal possession, those who constitute the crime of organizing and leading pyramid selling activities and the crime of fund-raising fraud shall be convicted and punished in accordance with the provisions of heavier punishment." In other words, the existence of the purpose of illegal possession is a key element that constitutes both the crime of organizing and leading pyramid selling activities and the crime of fund-raising fraud, otherwise it is not necessary to emphasize it separately in the form of attention to the provisions here. Then, if there is no purpose of illegal possession, it should only constitute the crime of organizing and leading pyramid selling activities.

Moreover, the subjective purpose is reflected in the objective behavior, and the nature of the subjective purpose can be separated from the performance of the objective behavior. If the purpose of pyramid selling crime is only illegal possession, then the perpetrator does not need to continuously rebate to the participants and deliberately maintain the pyramid selling activities, but only needs to absorb the amount of funds to meet the inner demand and abscond with the money. However, if the purpose of pyramid selling crimes is to continuously seek illegal benefits through the price difference between high entry fees and low rebates for a long time, pyramid selling criminals need to deliberately maintain pyramid selling organizations and constantly try to expand their scale. From this point of view, the purpose of pyramid selling crimes can only be to violate the market economic order and seek illegal benefits.

To uncover the veil of crime and to study the behavior in the natural sense of crime is driven by human will. In detail, based on the knowledge of the law of cause and effect, people foresee the possible results of their own activities within a certain range, and set various goals accordingly, and guide the activities to achieve this goal in a planned way. The actor first predetermines the goal he wants to achieve, and then chooses the means of behavior necessary to achieve that goal. Before the intended purpose of the crime, the individual act in the natural sense of the perpetrator is necessarily guided by a single direct purpose. For the crime of fraud, the purpose of its individual behavior is directed to the amount, and the amount is the core element. The aim is to defraud the same victim of as much money as possible on one or more occasions. The purpose of deception in pyramid selling crimes is to develop the number of people as the core element, and its purpose is to deceive as many people as possible. The amount of deception for a single person is based on the entry fee, which is often the same or similar.