Crime Overview Pyramid Scheme

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Millions of unsuspecting individuals are affected by pyramid schemes each year in the U.S., and billions of dollars are lost as a result of pyramid schemes annually. A pyramid scheme is an investment scheme in which a participant makes money by recruiting members who, in turn, make money by enticing others to join, often without any product or service being delivered.

The scheme is structured like a pyramid, starting with one person the initial recruiter who is on top, at the apex of the pyramid. This person recruits a second person, who is required to invest an amount, say $100, which is paid to the initial recruiter. In order to make his or her money back, the new recruit must recruit more people under him or her, each of whom will also have to invest $100. If the recruit gets 10 more people to invest, this person will make $900 with just a $100 investment. From there, those 10 new recruiters have to also recruit 10 new people each.

Different types of pyramid schemes include affinity group schemes, gifting schemes, investment schemes, multi-level marketing schemes, network marketing schemes, and chain letter schemes.

A successful pyramid scheme combines a fake business that seems credible enough that a monetary value may be easily attached. However, the payment itself may not actually be at a cash value. In order to gain credibility, most pyramid scams contain a lot of fake information, testimonials, and referrals. The flaw is that there is no end benefit. The money trickles up the chain and the ones at the bottom are the worst off.

Recruiting people to participate in a pyramid scheme is a felony crime in the United States, and is punishable by up to four years in prison, up to a $5,000 fine or both. Every person who recruits another participant into the pyramid scheme can be sued for twice the amount the recruit paid. If a marketing system is found to be a pyramid, the court can also order the defendant to pay civil penalties and consumer restitution. Therefore, if you are suing someone accused of running a pyramid scheme for damages resulting from the crime, whether or not they have been convicted in criminal court, you will need to hire a civil lawyer or attorney.

If you have been accused of being involved in a pyramid scheme, you should hire a criminal lawyer or attorney to help you with your case. Criminal lawyers and attorneys represent individuals who have been charged with crimes by arguing their cases in courts of law. After your arrest on grounds of conducting a pyramid scheme, request an attorney or contact a private criminal lawyer or attorney immediately.

Your criminal attorney will not only be familiar with laws concerning pyramid schemes in your state, but will also have knowledge of any precedents or recent cases which might have a relevant bearing on your case. Furthermore, skilled criminal attorneys are well-versed in the customs of court and the political and legal climate of that particular jurisdiction. Therefore, they will be able to work in your best interest, possibly brokering a plea deal or arguing for your defense should your case go to trial.

If you are ready to contact a criminal lawyer or attorney to help you with your case, visit the American Bar Association. The American Bar Association offers free access to their lawyer locator, a search function that can help you search for a suitable criminal lawyer or attorney in your area.