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Pyramid Scheme

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Pyramid Scheme
An illegal investment Scam based on a hierarchical setup. New recruits make up the base of the pyramid and provide the funding, or so-called returns, given to the earlier investors/recruits above them.
    
A pyramid scheme is initiated by an individual or a company that starts recruiting investors with an Offer of guaranteed High returns. As the scheme begins, the earliest investors do receive a High rate of return, but these gains are paid for by new recruits and are not a return on any real investment.
    
From the day the Scam is initiated, a pyramid scheme's liabilities exceed its assets. The only way it can generate wealth is by promising extraordinary returns to new recruits; the only way these returns can be paid is by getting additional investors. Invariably these schemes lose steam and the pyramid collapses.
Posted by  Marcus Evans (ANZ) Limited
 
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