1288             1997 Session Laws of Kansas             Ch. 178

An Act concerning crimes and punishment; relating to pyramid promotional schemes and
providing penalties therefor.

Be it enacted by the Legislature of the State of Kansas:

Section 1. (a) As used in this section, ``pyramid promotional scheme''
means any plan or operation by which a participant gives consideration
for the opportunity to receive compensation which is derived primarily
from any person's introduction of other persons into participation in the
plan or operation rather than from the sale of goods, services or intangible
property by the participant or other persons introduced into the plan or
operation.

Ch. 178             1997 Session Laws of Kansas             1289

(b) Establishing, operating, advertising or promoting a pyramid pro-
motional scheme shall be a severity level 9, nonperson felony.

(c) A limitation as to the number of persons who may participate or
the presence of additional conditions affecting eligibility for the oppor-
tunity to receive compensation under the plan or operation does not
change the identity of the scheme as a pyramid promotional scheme nor
is it a defense under this section that a participant, on giving considera-
tion, obtains any goods, services or intangible property in addition to the
right to receive compensation.

(d) The attorney general, or county attorney or district attorney, or
both, may institute criminal action to prosecute this offense.

(e) This section shall be part of and supplemental to the Kansas crim-
inal code.

Sec. 2. This act shall take effect and be in force from and after its
publication in the Kansas register.

Approved May 15, 1997.

Published in the Kansas Register: May 22, 1997.