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TUCoPS :: Scams :: 206e1.txt

Literal and distilled versions of Canadian Criminal Code excerpts dealing with chain letters, pyramid sales etc.




An addendum to "Break the Chain"
(C) 1995 Whirlwind Software

Here is an excerpt from the Criminal Code of Canada.  The 1993 Carswell
edition points to this section in the index under "Pyramid Selling".

It states that anyone who:

"conducts or manages any scheme, contrivance, or operation of any
kind by which any person, on payment of any sum of money, or the giving
of any valuable security, or by obligating himself to pay any sum of
money or give any valuable security, shall become entitled under the
scheme, contrivance, or operation to receive from the person conducting
or managing the scheme, contrivance or operation, or any other person, a
larger sum of money or amount of valuable security than the sum or
amount paid or given, or to be paid or given, by reason of the fact that
other persons have paid or given, or obligated themselves to pay or give
any sum of money or valuable security under the scheme, contrivance, or
operation"

... is guilty of an offence.

That's pretty convoluted language, as is most legalese.  Let's "distill"
it a bit by replacing "scheme, contrivance or operation" with just
"scheme" and "a sum of money or valuable security" with just "money".

So we have that anyone who:

"conducts any scheme by which a person, on payment of money, shall
become entitled under the scheme to receive from the person conducting
the scheme (or from any other person) a larger sum of money than the
amount paid, by reason of the fact that other persons have paid money
under the scheme"

...is guilty.

What it's saying here is that you can't start, or involve yourself in, a
scheme wherein you get money because others paid into the scheme.
This outlaws the old fashioned pyramid where you simply sent the letter
out to more people and sent your $2 or $5 to the people on the list.
However, the phrase "by reason of the fact that other persons have
paid..." fairly clearly limits the law to covering the just-send-money
pyramid game - where you send money and get nothing back for it except
the "right" to continue propagating the scheme.

It does not cover multi-level sales of real products or services, not
even multi-levels that could, by their nature, form exponentiating
pyramids.  Technically, this law doesn't even apply to the "Four
Reports" scheme, though any sane prosecutor trying a four-report'er
would wish it did.  However "postal fraud" sections of the CCC cover the
"Four Reports" and "Dave Rhodes" schemes effectively.


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