Home » Criminal Law » Pyramid Schemes

A pyramid scheme typically involves a few people at the top of the pyramid who get their friends and relatives to give them money in return for the chance to recruit more participants. Some illegal pyramids are disguised as multilevel sales companies. When the emphasis is on recruiting new members rather than selling products, then the organization is probably an illegal pyramid, even though it might distribute products.

Pyramid schemers often claim that attorneys general approve of the scheme, or that it is run by a legitimate professional or something with respect in the community, such as a preacher. However, pyramid schemes are illegal. Ask yourself before you join any multi-level sales opportunity whether or not you would buy the product.

If you join a pyramid scheme, chances are, you will lose your money. Worse, the people you recruited will also lose their money, and might ultimately bring a personal lawsuit against you. Then, you could be prosecuted by your state attorneys general office, and you may be forced to pay restitution to all the individuals you swindled.

Just remember this: To reach the 27th level of a pyramid scheme, an individual would have to recruit more people than are on the face of the earth to get his or her money back.


Related Criminal Law Articles