[§480-3.3]  Endless chain schemes.  A
person engages in an unfair method of competition and an unfair or deceptive
act or practice within the meaning of section 480-2 when, in the conduct of any
trade or commerce, the person contrives, prepares, sets up, proposes, or
operates any endless chain scheme.  As used in this section, an endless chain
scheme means any scheme for the disposal or distribution of property whereby a
participant pays a valuable consideration for the chance to receive
compensation for introducing one or more additional persons into participation
in the scheme, or for the chance to receive compensation when a person
introduced by the participant introduces a new participant.  Compensation, as
used in this section, does not mean or include payments based upon sales made
to persons who are not participants in the scheme and who are not purchasing in
order to participate in the scheme. [L 1970, c 28, §1; gen ch 1985]