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  • NJ A2004
  • Establishes certain penalties for operating or participating in pyramid promotional schemes.*
In Committee
Crossed Over
2016-2017 Regular Session
This bill establishes criminal penalties for promoting and participating in "pyramid promotional schemes." A pyramid promotional scheme requires participants to recruit other individuals into the scheme in order for the original participants to receive any compensation. The scheme is designed to compensate only those participants who initially join the pyramid, while later participants lose money. The bill makes it a crime of the third degree to knowingly promote or sell a pyramid promotional scheme. Under the bill, a "pyramid promotional scheme" is defined as any plan or operation in which a participant gives consideration for the right to receive compensation that is derived primarily from the recruitment of other persons as participants in the plan or operation, rather than from the sales of goods, services, or intangible property by the participant or by participants to others. "Consideration" is defined as the payment of cash or the purchase of goods, services, and intangible property, and does not include the purchase of goods or services furnished at cost to be used in making sales and not for resale. The bill also provides that knowing participation in a pyramid promotional scheme is a crime of the fourth degree, unless the amount the person contributed to the scheme was $100 or less, in which case it is a disorderly persons offense. The bill specifically exempts plans or operations in which consideration is given by participants in return for the right to receive compensation based on their sales or personal use of goods, services, or intangible property. The bill also exempts plans and operations that implement an appropriate inventory repurchase program and that do not promote inventory loading.
Judiciary, 2nd Reading in the Assembly, 2nd Reading in the Senate, Bills and Joint Resolutions Signed by the Governor, Passed Assembly, Passed both Houses
Approved P.L.2017, c.74.  (on 5/11/2017)
Date Chamber Action Description
5/11/2017 S Approved P.L.2017, c.74.
3/13/2017 S Passed Senate (Passed Both Houses) (37-0)
3/13/2017 S Substituted for S731 (SCS)
2/6/2017 S Reported from Senate Committee, 2nd Reading
2/6/2017 Senate Judiciary Hearing (19:00 2/6/2017 The committee will not be accepting any oral testimony on the ju)
6/6/2016 S Received in the Senate, Referred to Senate Judiciary Committee
5/26/2016 A Passed by the Assembly (72-0-0)
5/12/2016 A Reported from Assembly Comm. as a Substitute, 2nd Reading
5/12/2016 Assembly Consumer Affairs Hearing (11:00 5/12/2016 Committee Room 13, 4th Floor)
1/27/2016 A Introduced, Referred to Assembly Consumer Affairs Committee
Date Motion Yea Nay Other
Detail 3/13/2017 Senate Floor: Substitute For S731 (Voice Vote) 0 0 0
Detail 3/13/2017 Senate Floor: Third Reading - Final Passage 37 0 3
Detail 2/6/2017 Senate Judiciary Committee: Reported Favorably 13 0 0
Detail 5/26/2016 Assembly Floor: Third Reading - Final Passage 72 0 8
Detail 5/12/2016 Assembly Consumer Affairs Committee: Reported with Substitution 4 0 0