Quanjian Natural Medical Technology Development Co., LTD. (hereinafter referred to as Quanjian) was established on February 17, 2004. In December 2018, Doctor Dingxiang published the article "Billions of health care Empire Quanjian and Chinese families under its Shadow" to push Tianjin Quanjian company into the wind. In January 2019, the Tianjin Public security organ filed an investigation against Quanjian on suspicion of organizing and leading pyramid selling activities and false advertising. In November 2019, Quanjian Company and Shu Yuhui, the actual controller of Quanjian Company, were suspected of organizing and leading pyramid selling activities and other crimes, and were prosecuted by the People's Procuratorate of Wuqing District of Tianjin to the People's Court of Wuqing District of Tianjin in accordance with law. It has been found that since 2007, with high rewards as the bait, Quanjian lured others to buy products whose cost significantly deviated from the price to become members of Quanjian, and then made a rebate based on the number of members, induced members to continue to develop others to participate in the formation of a pyramid hierarchical relationship, and obtained huge economic benefits. Shu Yuhui, as the actual controller of Quanjian Company, plays a decisive role in the organization and leadership of the company's pyramid marketing activities. Others participate in the organization and leadership of pyramid marketing activities according to Shu Yuhui's instruction, or develop members to participate in pyramid marketing activities as a dealer of Quanjian Company. On January 8, 2020, Tianjin Wuqing District People's Court issued a public judgment on the case of Quanjian Company and the actual controller of Quanjian Company Shu Yuhui and 12 other people organizing and leading pyramid marketing activities according to law, and found that the defendant Quanjian Company and the defendant Shu Yuhui and 12 other people constituted the crime of organizing and leading pyramid marketing activities, and sentenced the defendant Quanjian Company to a fine of RMB 100 million yuan. The defendant Shu Yuhui was sentenced to nine years in prison and fined 50 million yuan; The other 11 defendants were sentenced to prison terms ranging from three to six years and fined; The illegal gains shall be recovered and turned over to the state Treasury. Shu Yuhui, the actual controller of Quanjian, pleaded guilty in court.

Pyramid marketing is a form of commodity sales developed on the basis of direct selling, also known as "multi-level pyramid marketing". Pyramid selling originated in the United States in the late period of World War II, formed in postwar Japan, and broke out in China. In the process of the development of China's market management, MLM has caused great confusion to the development of China's market economy, especially at the end of the 20th century, which has led to the fragmentation of many families and caused serious social problems. According to the Regulations on the Administration of the Prohibition of pyramid Selling, pyramid selling refers to the development personnel of organizers or operators who seek illegal benefits and disturb economic order by calculating and paying remuneration to the developed personnel based on the number or sales performance of the developed personnel directly or indirectly, or requiring the developed personnel to pay a certain fee as a condition of membership. Behavior that affects social stability. In business practice, there are four typical pyramid selling behaviors: (1) The entry fee method, that is, the organizer or operator through the development personnel, requires the development personnel to pay fees or in the form of commodity subscription to pay fees, obtain qualifications to join or develop other personnel to join, and seek illegal interests. (2) Recruitment, that is, the organizer or operator, through the development personnel, requires the development personnel to develop other personnel to join, the development personnel based on the number of direct or indirect rolling development of the calculation and payment of remuneration (including material incentives and other economic benefits), seeking illegal interests. (3) Team remuneration method, that is, the organizer or operator through the development personnel, requires the development personnel to develop other personnel to join, form a relationship between the upper and lower line, and calculate and pay the line remuneration (including material incentives and other economic benefits) based on the sales performance of the lower line, and seek illegal interests. (4) Entry fee and recruitment method, that is, in the name of business activities such as selling goods and providing services, the organizer or operator requires participants to pay fees or purchase goods and services to obtain membership, and forms levels in a certain order to lure or coerce participants to continue to develop others to participate. Directly or indirectly taking the number of development personnel as the basis for calculation of remuneration or rebates and seeking illegal interests. Within the scope of administrative supervision, the above behaviors are pyramid marketing behaviors, which are prohibited by Chinese law.

However, pyramid marketing behavior is not equal to pyramid marketing crime. According to the provisions of the Criminal Law, in the name of business activities such as selling goods and providing services, the organization or leader requires the participants to pay fees or purchase goods and services to obtain the qualification for joining, and forms a hierarchy in a certain order, directly or indirectly using the number of development personnel as the basis for remuneration or rebates, luring or coerce the participants to continue to develop others to participate, and defrauding property, Whoever engages in pyramid selling activities that disrupt economic and social order shall be sentenced to fixed-term imprisonment of not more than five years or criminal detention and shall also be fined; If the circumstances are serious, he shall be sentenced to fixed-term imprisonment of not less than five years and shall also be fined. Therefore, in the scope of criminal crime, the pyramid scheme that the crime of organizing and leading pyramid scheme activities to combat refers to the pyramid fraud sales in the form of charging "entry fees" and "pulling heads", and does not include the simple "team remuneration" type of pyramid scheme activities for the purpose of selling goods and based on sales performance. According to the regulations, if more than 30 people participate in pyramid marketing activities within the organization and the level is above three levels, the organizers and leaders should be investigated for criminal responsibility. It should be pointed out that "more than 30 people and more than three levels" is the calculation of the number of people and levels within the MLM organization, and the calculation of the number of people and levels of the organizers and leaders who directly or indirectly develop and participate in MLM activities, including the organizers and leaders themselves and their levels; Level 3 or above includes level 3. As far as the pyramid scheme crime of Quanjian is concerned, the behavior of Quanjian enticing others to buy the products whose cost deviates from the price seriously to become the members of Quanjian is the "entry fee" behavior; Quanjian Company conducts rebates as "pulling heads" based on the number of developing members; Quanjian company induced members to continue to develop others to participate in the formation of a pyramid-style hierarchical relationship for the "team remuneration" behavior, its behavior is no longer a general pyramid marketing behavior, but constitutes a "pyramid marketing crime" severely cracked down on by China's criminal law, and was eventually investigated for criminal responsibility.

Pyramid selling behavior has great complexity and social harm, operators should clearly recognize its boundaries. On the one hand, operators should correctly understand the boundaries of pyramid marketing activities in the scope of administrative supervision, and on the other hand, they should accurately understand the boundaries of pyramid marketing crimes in the scope of criminal law. In sales, managers should standardize business models and avoid team compensation. Although the simple "team remuneration" based on sales performance for the purpose of selling goods does not constitute a pyramid selling crime, it is still a pyramid selling behavior cracked down on in the scope of administrative supervision, and it needs to bear legal adverse consequences such as fines. In accordance with relevant provisions, those who organize, lead or plan pyramid schemes shall be confiscated by the administrative department for industry and commerce of their illegal property, their illegal gains and fined between 500,000 yuan and 2 million yuan. Operators in the design of sales models, to comply with the principle of prohibiting team remuneration, so as not to cause unnecessary administrative and legal risks of pyramid marketing. At the same time, in the sale, the operator shall especially not implement for the purpose of fraud, with the form of product sales, by charging membership fees, pulling heads or team remuneration to achieve illegal profits, seek illegal interests, otherwise it will be suspected of constituting a crime.