Investment Fraud Lawyer

Common types of investment fraud

A Pyramid Scheme is a typical investment fraud.

Contact for a solid investment fraud defense from Crime Attorneys.

Pyramid schemes can also be known as "chain referral", "binary compensation" or "matrix marketing" schemes. They are common marketing and investment frauds that reward participants for enticing other people to join the program. Ponzi schemes, by comparison, pay earlier investors with money deposited by later investors without the emphasis on recruitment or awareness of participation structure.

Pyramid schemes involve the exchange of money and recruitment. There is typically a pretense that new participants can recoup their original investments by inducing two or more prospects to make the same investment.

For each person brought in the victim is promised future monetary rewards or bonuses based on advancement up the corporate structure. Over time, the hierarchy of people involved resembles a pyramid as newer, larger rows of participants join the established organization at the bottom.

“Little or no work” is their mantra because “the people below you will". The realty is that the actual business of sales and supervision is hard. So if everyone is doing little or no work, how this venture be a success?

The marketing of a product or service (if it even exists) is only of secondary importance in an attempt to evade prosecution or to provide a corporate substance. Often there is no established market for the products so the sale of such merchandise, is simply a front for transactions which occur only among and between the operation's distributors.

Therefore, earning potential depends primarily on how many people are signed up, not how much merchandise is sold.

Review the stellar team to learn more about how to protect you rights.