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, Wuhan, Beijing, and Qingdao all reported new COVID-19 positive cases, and the source of these dozen or so positive cases all traced back to a “training session.” The organizer of the training session was the Shanghai distributor of Nu Skin China——Shanghai Sheyao Marketing Service Center. Nu Skin responded to the media, stating that the training was an annual meeting held privately by the Shanghai distributor in violation of regulations and had not been reported to the headquarters for approval.
The last time Nu Skin attracted widespread attention in China was in 2019, when Lin, a 34-year-old Nu Skin salesperson, fell ill and relied on drinking Nu Skin juice to “detox,” refusing medical treatment, and ultimately died. Nu Skin issued a statement in response, saying that following an internal investigation, the distributor involved had violated company regulations, and their contract had been terminated and cooperation ended.
Lin's friend once said that Nu Skin's training is designed to make people hostile toward traditional medicine. They (Nu Skin) claimed that 95% of medications are ineffective, and that if you truly love your family, you should keep them away from medical care.
It is reported that the company established a pyramid-like structure, where the more tiers developed, the greater the economic returns, which is a typical pyramid scheme model. Online information readily reveals that since Nu Skin Enterprises officially entered China in 2003, controversies over suspected pyramid schemes and organized brainwashing gatherings 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 disseminated false information to encourage people to join its direct sales team. Upon closer examination, it becomes evident that becoming a Nu Skin distributor requires purchasing Nu Skin products first, and Nu Skin further classifies distributors into seven levels based on product sales volume and the number of downline members recruited. A comparison with Article 224-1 of the Criminal Law mentioned above reveals that such practices are highly likely to constitute pyramid schemes. In addition, Nu Skin frequently organizes large-scale gatherings to “brainwash” its distributors, using model figures to exert group pressure and thereby exercise psychological control over individuals.
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.
