How does it work? One person starts the pyramid by calling a number of people to join him, and they pay a fee to join. They are told that if they persuade others to join theyll receive a specific amount of money for a specific number of people that joined. This goes on and on and on and more and more people join the scheme creating a pyramid The person that started will take all of the fees collected from the recruitments. The main idea is that the person who started the pyramid gets richer and richer, but the others remain expectant of a non-existent reward.

Why does it work? It works because of the desire by each member to get more money. They keep on recruiting people, while the money keeps going on to the first person, sitting on the capstone. The first person gets the trust of all the recruits very cleverly.

Why is it not a good idea? First, the person starting the pyramid is not sure of wholl be recruited further on. This can be a authority personnel. The first person can be caught. Secondly, even if the pyramid works out without being caught, only the first person becomes rich and the others get poor and poor. Finally, the economy of the country or city or town can be damaged. Leading to a great crisis, which would increase the rate of inflation. This will lead to unemployment.

Why is it illegal? It is illegal, because the person at the top of the pyramid is money laundering and committing fraud, both of these are state felonies almost everywhere around the world.

2005 A Pyramid Scam Based on a true story One day I received a call from my best friend. He told me about a very interesting and exciting scheme that could make me rich, very rich. Then I contacted the guy with the scheme. His name was Rogue. He told me to pay a fee and join the pyramid. He also told me that in celebration of my being a millionth member, I would get $2000 if I persuaded 10 more people to join, which is twice of what other members get. He told me that I would have to wait to get my reward. He told me that he would contact me in a week.

I paid him the fees and persuaded not ten but fifteen more people into the scheme. I waited for a week, but only got s postponing the date when I would receive my reward. Then after a few weeks the s stopped coming. I tried calling, which was of no use. Feeling really enraged, with temper exploding from every part of my body, I called the cops. A week later I got a call from them informing that I was one of the many victims, including some cops too, of an organization that was famed for pyramid selling. They said that they could only sympathize with me, because the gang was now in Spain, enjoying of my money, and they cannot do anything except inform the authorities in Spain A Pyramid Scam Based on a true story