The Virginia Supreme Court held that payouts beyond a single level of recruitment were not necessary to find a company to be a pyramid scheme. Durastill claimed that the essential nature of a pyramid scheme as defined by statute was a plan whereby new members were enticed to join based on the opportunity to make money on multiple levels of sales by their down lines. The Court disagreed, holding that the statute was designed to regulate promotional programs where profit was only possible through never ending expansion. Because Durastill's marketing program was based on the position that a new recruit would be faced with fewer selling opportunities than their recruiter, the same principle was at play.
Case and case summary are also available at: http://www.mlmlegal.com/legal-cases/Love_v_DurastillofRichmondInc.php
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