Arizona Pyramid Schemes: Hard to Spot, Doomed to Topple
Similar to Arizona Ponzi schemes, pyramid schemes are illegal and usually end in disaster for everyone involved. In a pyramid scheme, you pay a sum to get in on what seems like a legitimate opportunity, but you must recruit new investors in order to get paid. The person at the top of the pyramid gets a cut from each new recruit, sometimes making a large amount of money this way. The problem occurs as more and more people are recruited, since the returns become increasingly smaller for the investors at the bottom of the pyramid, until the entire scheme collapses.
Many pyramid schemes come under the guise of legitimate investments or opportunities, but you run into trouble as more and more people are required to keep the pyramid going. For example, in a model where each recruit must recruit six more, the number of new recruits required actually exceeds the population of the world by the 13th level! It pays to be careful where and how you make your money, but sometimes it’s impossible to tell if an opportunity is really a pyramid scheme or not.
If you have been accused of being involved in an Arizona pyramid scheme, give the Phoenix criminal defense attorneys at Curry, Pearson & Wooten a call today at 1-888-929-5292. During your free consultation, we can help answer your questions and explain your rights. Don’t forget your free copy of our book, Arizona Criminal Law – What You Must Know.