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Ch. 26
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2002 LAWS OF MARYLAND
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of the court to set a penalty" is deleted as implicit in the establishment of
maximum penalties.
Defined terms: "County" § 1-101
"Person" § 1-101
8-404. PYRAMID PROMOTIONAL SCHEMES.
(A) DEFINITIONS.
(1) IN THIS SECTION THE FOLLOWING WORDS HAVE THE MEANINGS
INDICATED.
(2) "COMPENSATION" INCLUDES PAYMENT BASED ON A SALE OR
DISTRIBUTION MADE TO A PERSON WHO:
(I) IS A PARTICIPANT IN A PLAN OR OPERATION; OR
(II) ON MAKING A PAYMENT, IS ENTITLED TO BECOME A
PARTICIPANT.
(3) "CONSIDERATION" DOES NOT INCLUDE:
(I) PAYMENT FOR PURCHASE OF GOODS OR SERVICES FURNISHED
AT COST FOR USE IN MAKING SALES TO PERSONS WHO ARE NOT PARTICIPANTS IN
THE SCHEME AND WHO ARE NOT PURCHASING IN ORDER TO PARTICIPATE IN THE
SCHEME;
(II) TIME OR EFFORT SPENT IN PURSUIT OF SALES OR RECRUITING
ACTIVITIES; OR
(III) THE RIGHT TO RECEIVE A DISCOUNT OR REBATE BASED ON
THE PURCHASE OR ACQUISITION OF GOODS OR SERVICES BY A BONA FIDE
COOPERATIVE BUYING GROUP OR ASSOCIATION.
(4) "PROMOTE" MEANS TO INDUCE ONE OR MORE PERSONS TO BECOME
A PARTICIPANT.
(5) "PYRAMID PROMOTIONAL SCHEME" MEANS A PLAN OR OPERATION
BY WHICH A PARTICIPANT GIVES CONSIDERATION FOR THE OPPORTUNITY TO
RECEIVE COMPENSATION TO BE DERIVED PRIMARILY FROM ANY PERSON'S
INTRODUCTION OF OTHERS INTO PARTICIPATION IN THE PLAN OR OPERATION
RATHER THAN FROM THE SALE OF GOODS, SERVICES, OR OTHER INTANGIBLE
PROPERTY BY THE PARTICIPANT OR OTHERS INTRODUCED INTO THE PLAN OR
OPERATION.
(B) PROHIBITED.
A PERSON MAY NOT ESTABLISH, OPERATE, ADVERTISE, OR PROMOTE A
PYRAMID PROMOTIONAL SCHEME.
(C) PROHIBITED DEFENSES.
IT IS NOT A DEFENSE TO A PROSECUTION UNDER THIS SECTION THAT:
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- 608 -
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