1. FTC – Federal Trade Commission
Main Purpose: to prevent consumers from becoming victims of investment fraud The FTC prevents business practices that are anticompetitive or deceptive or unfair to consumers. The Federal Trade Commission helps keep the prices of goods and services low for consumers by enforcing antitrust laws (prevent a monopoly from forming). Collects complaints about identify theft and Do Not Call violations and sues companies that falsely advertise products.

2. Federal Agencies that protect you and me
The Consumer Product Safety Commission is responsible for consumer product safety.
In 1972, Congress passed the Consumer Product Safety Act, which gave the CPSC powers to protect individuals from unsafe consumer products. They accomplish this task through evaluating the safety of consumer products, developing standards, and conducting research as it pertains to safety.
Ex: Staples recalled their back-in-motion office chairs
due to a fall hazard. (4/14/16)

3. What is a Pyramid Scheme?
The Scheme
As its name indicates, the pyramid scheme is structured like a pyramid.
It typically starts with one person - the initial recruiter. This person recruits a second who is required to "invest" a certain amount, 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. If the recruit gets 10 more people to invest, he or she will make a profit with just a small investment.

4. How a Pyramid Scheme (or Multi-Level Marketing) works
Multi-level market (MLM) or network marketing is an American institution. Companies like Amway, Tupperware, Herbalife, Avon, Mary Kay and The Pampered Chef support huge networks of distributors and recruits who sell every type of product from dietary supplements to kitchenware to beauty products. Salespeople are called independent business owners (IBO) and generally work from their homes.
On the surface, it's hard to tell the difference between a legitimate MLM and a pyramid scheme. That's because they're both built on the business model of "multiple levels" of distributors and recruits. Some critics of MLMs claim that all of them, even the supposedly "legitimate" ones, are pyramid schemes in disguise.

5. On March 12, 2014, the United States Federal Trade Commission (FTC) launched an official investigation of the nutritional supplement company Herbalife, based on allegations that the company was running a pyramid scheme - a fraudulent investment scheme based on a hierarchical setup.
It was determined that Herbalife is not a pyramid scheme (2016).

6. What is a Ponzi scheme?
A Ponzi scheme is a scam investment designed to separate investors from their money. It is named after Charles Ponzi, who constructed one such scheme at the beginning of the 20th century, though the concept was well known prior to Ponzi.
The scheme is designed to convince the public to place their money into a fraudulent investment. Once the scam artist feels that enough money has been collected, he disappears - taking all the money with him.

7. How Big Can Ponzi Schemes Get?
Into the billions of dollars. In 2008 we saw the fall of arguably the largest Ponzi scheme in history - Bernard L. Madoff Investment Securities LLC. The scheme had all the ingredients of a classic Ponzi scheme, including a founder, Bernard L. Madoff, that had a great deal of credibility as he had been in the investment business since Madoff had also been the chairman of the board of directors of NASDAQ, an American stock exchange. The estimated losses from the Ponzi scheme are in between 34 and 50 billion U.S. dollars. The Madoff scheme collapsed; Madoff had told his sons that "clients had requested approximately $7 billion in redemptions, that he was struggling to obtain the liquidity necessary to meet those obligations."