Virginia law § 18.2-239 criminalizes pyramid promotional schemes, making their operation a Class 1 misdemeanor. It defines key terms like compensation, consideration, and promotion, and declares contracts related to such schemes void and unenforceable. Violations are considered prohibited practices and are subject to consumer protection enforcement.
A pyramid promotional scheme involves a plan where compensation is primarily earned from recruiting others rather than from selling goods or services. Such schemes are illegal in Virginia.
Operating a pyramid scheme is classified as a Class 1 misdemeanor, which can result in criminal charges and penalties under Virginia law.
No, any contracts involving consideration for participation in a pyramid scheme are considered void and unenforceable as they are against public policy.
Compensation includes money or anything of value, excluding payments based on sales to non-participants. Consideration refers to cash, goods, services, or intangible property paid or purchased.