Free US Law Dictionary

Pyramid Scheme

A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, usually without any product or service being delivered. It has been known to come under many guises. Some famous examples including the massive Albanian Pyramid Schemes of 1996[1] were technically not Pyramid schemes but Ponzi schemes.

Pyramid schemes are illegal in many countries, including the United States,[2] the United Kingdom, France, Canada, Malaysia, Norway, Australia,[3] New Zealand,[4] Nepal,[citation needed] Sri Lanka,[citation needed] and Iran.[citation needed] These types of schemes have existed for at least a century.