Pyramid schemes cannot escape the vast net of justice; epidemic prevention and control is everyone's responsibility.
Compiled from: People's Daily, Red Star News
Case review
A few days ago, new COVID-19 positive cases were reported in Wuhan, Beijing, and Qingdao, all traced back to a "training meeting" organized by Shanghai Sheyao Marketing Service Center, a distributor of Nu Skin in China. Nu Skin responded to the media, stating that the training was an unauthorized annual meeting held privately by the Shanghai distributor, which was not reported to headquarters for approval.
The last time Nu Skin attracted widespread attention in China was in 2019, when a 34-year-old Nu Skin salesperson, Lin, fell ill and relied on drinking Nu Skin juice for "detoxification," refusing medical treatment, and ultimately died. Nu Skin issued a statement in response, saying that after an internal investigation, the involved distributor had violated company regulations, and their contract was terminated, ending the cooperation.
Lin's friend once said that Nu Skin's training was designed to make people hostile to traditional medicine. They (Nu Skin) claimed that 95% of medications are ineffective, and if you truly love your family, you should keep them away from medical care.
It is reported that the company built a "pyramid-style" structure, where the more levels developed, the greater the economic benefits, which is a typical pyramid scheme model. From relevant information online, it is not difficult to find that since Nu Skin officially entered China in 2003, controversies over alleged pyramid schemes and organizing gatherings for "brainwashing" have never ceased.
Article 224-1 of the Criminal Law
Whoever organizes or leads pyramid scheme activities under the guise of selling goods or providing services, requiring participants to pay fees or purchase goods or services to obtain membership, forming levels in a certain order, directly or indirectly using the number of people recruited as the basis for compensation or rebates, inducing or coercing participants to continue recruiting others, defrauding property, and disrupting economic and social order, shall be sentenced to fixed-term imprisonment of not more than five years or criminal detention, and shall also be fined; if the circumstances are serious, the sentence shall be fixed-term imprisonment of not less than five years, and a fine shall also be imposed.
[1] The author's perspective
In fact, it was pointed out long ago that Nu Skin fabricated scientific research results and promoted false information to encourage people to join the Nu Skin direct sales team. Upon deeper investigation, it becomes clear that becoming a Nu Skin direct seller requires first purchasing Nu Skin products, and Nu Skin also classifies direct sellers into seven levels based on product sales volume and the number of downline recruits. Comparing this with the aforementioned Article 224-1 of the Criminal Law, it is not difficult to find that such behavior is highly likely to constitute a pyramid scheme. Additionally, Nu Skin often organizes large gatherings to "brainwash" direct sellers, using role models and group dynamics to exert mental control over people.
On the other hand, regarding Nu Skin's attempt to shift the blame for this outbreak onto frontline distributors, as long as the distributor is part of the branch or headquarters' management team, it does not have independent legal personality. Therefore, all operational consequences and legal liabilities will be borne by the headquarters. From this, we can see that as long as the business entity does not have independent legal personality, its business activities are considered job-related actions, and the headquarters must bear responsibility.
