Schaffer v. Talerico , 118 Misc.2d 66 (1983)

Is a contract in furtherance of a pyramid scheme enforceable?

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The Utica City Court held that the sales program was a pyramid scheme and enforcing the contract would be a violation of state public policy. Schaffer managed a sales program between Amway distributors where they would circulate products among themselves for bonuses and recruitment fees. The products did not actually change hands; invoices were merely circulated representing their sale and shipment. The Court found that the plan was a pyramid scheme because no products were actually sold, and the scheme depended on the recruitment of additional member to be viable. The court refused to honor the claim or counter-claims of the parties.

Full case and case summary also available online at: http://www.mlmlegal.com/legal-cases/Schaffer_v_Talerico.php

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Published In: Civil Procedure Updates, Criminal Law Updates, MLM / Direct Sales Updates, MLM Consulting / Network Marketing Updates

Reference Info:State, 2nd Circuit, New York | United States

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