H 4788 General Bill, By Simrill
 A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION
 16-19-190 SO AS TO DEFINE AND PROHIBIT PYRAMID CLUBS, TO PROVIDE CRIMINAL
 PENALTIES FOR ESTABLISHING, OPERATING, PARTICIPATING IN, OR PROMOTING A
 PYRAMID CLUB; AND TO AMEND SECTION 39-5-30, RELATING TO A PYRAMID CLUB BEING
 DECLARED AN UNFAIR TRADE PRACTICE, SO AS TO FURTHER PROVIDE THAT, IN ADDITION
 TO CIVIL PENALTIES AND COSTS, THE ATTORNEY GENERAL MAY RECOVER THE FEES OR
 DUES A PERSON RECEIVES FOR ESTABLISHING, OPERATING, PARTICIPATING IN, OR
 PROMOTING A PYRAMID CLUB, AND TO PROVIDE FOR THE DISTRIBUTION OF THE FEES OR
 DUES TO THE LAW ENFORCEMENT AGENCY AND THE PROSECUTING AGENCY INVOLVED IN THE
 INVESTIGATION AND PROSECUTION, AND TO THE STATE.

   03/16/00  House  Introduced and read first time HJ-3
   03/16/00  House  Referred to Committee on Judiciary HJ-3

TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 16-19-190 SO AS TO DEFINE AND PROHIBIT PYRAMID CLUBS, TO PROVIDE CRIMINAL PENALTIES FOR ESTABLISHING, OPERATING, PARTICIPATING IN, OR PROMOTING A PYRAMID CLUB; AND TO AMEND SECTION 39-5-30, RELATING TO A PYRAMID CLUB BEING DECLARED AN UNFAIR TRADE PRACTICE, SO AS TO FURTHER PROVIDE THAT, IN ADDITION TO CIVIL PENALTIES AND COSTS, THE ATTORNEY GENERAL MAY RECOVER THE FEES OR DUES A PERSON RECEIVES FOR ESTABLISHING, OPERATING, PARTICIPATING IN, OR PROMOTING A PYRAMID CLUB, AND TO PROVIDE FOR THE DISTRIBUTION OF THE FEES OR DUES TO THE LAW ENFORCEMENT AGENCY AND THE PROSECUTING AGENCY INVOLVED IN THE INVESTIGATION AND PROSECUTION, AND TO THE STATE.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. The 1976 Code is amended by adding:

"Section 16-19-190. (A) As used in this section, 'Pyramid club' means a group, plan, program, device, or scheme having the following provisions, regardless of the descriptions actually used:

(1) new members of the club are required to pay or give fees, dues, or anything of material value to other members for the opportunity to participate;

(2) membership of the club increases through a chain process of new members securing other new members; and

(3) as a result of the increases in membership, new members advance in the club to a position where they are entitled to receive fees, dues, or anything of material value from other members.

(B)(1) A person may not establish, operate, participate in, or otherwise promote a pyramid club.

(2) A person who establishes or operates a pyramid club is guilty of a misdemeanor and, upon conviction, must be fined one thousand dollars and imprisoned for one year for each offense.

(3) A person who participates in or otherwise promotes a pyramid club is guilty of a misdemeanor and, upon conviction, must be fined up to one hundred dollars or imprisoned for thirty days for each offense."

SECTION 2. Section 39-5-30 of the 1976 Code is amended to read:

"Section 39-5-30. Any contract or agreement between an individual and any pyramid club, or other group organized or brought together under any plan or device whereby fees or dues or anything of material value to be paid or given by members thereof are to be paid or given to any other member thereof, which plan or device includes any provision for the increase in such membership through a chain process of new members securing other new members and thereby advancing themselves in the group to a position where such members in turn receive fees, dues or things of material value from other members, is hereby declared to be an unfair trade practice pursuant to SECTION 39-5-20 (a) of the South Carolina Unfair Trade Practices Act of 1971. (A) Establishing, operating, participating in, or otherwise promoting a pyramid club as defined in Section 16-19-190(A) is an unfair trade practice as provided in Section 39-5-20.

(B) In addition to the civil penalties and costs provided by Section 39-5-110, the Attorney General may recover fees, dues, or anything of material value that a person received as a result of establishing, operating, participating in, or otherwise promoting a pyramid club.

(C) Any amounts recovered under subsection (B) must be distributed as follows: seventy-five percent to the law enforcement agency involved in the action, twenty percent to the prosecuting agency, and five percent to the State Treasurer for deposit in the general fund of the State. If no law enforcement agency is involved in any manner with obtaining evidence regarding the pyramid club, the prosecuting agency shall also receive the amount otherwise allocable to a law enforcement agency.

(D) Any contract or agreement for which the consideration or a portion of the consideration is the opportunity or chance to participate in a program described in Section 16-19-190(A) is contrary to public policy and is void and unenforceable."

SECTION 3. The Code Commissioner is directed to add the offense provided in Section 16-19-190(B)(2) to the appropriate category in Section 16-1-100 of the 1976 Code.

SECTION 4. All proceedings pending and all rights and liabilities existing, acquired, or accrued at the time this act takes effect are saved. The provisions of this act apply prospectively to crimes and offenses committed on or after the effective date of this act.