Pyramid Schemes: Building lies on hopes and dreams

A pyramid scheme is much like the old chain letters people received when the post office was the en vogue form of communication. The way this scheme works is simple and very identifiable. One person begins at the top of the pyramid and recruits a few other people to “invest” some amount of money, say $100, into the initial investor. These new recruits go out and recruit more people, who recruit more people thus promulgating the scam further. The fraud comes in when people closer to the bottom of the pyramid cannot recruit enough people to pay off those who are a level above them, thus losing money. There are many types of pyramid schemes that have similar motives and results: invest in order to see a profit, but there is nothing tangible to invest in. Other similar schemes are called, ponzi schemes, chain letters, and multilevel marketing.

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