Ponzi Schemes v. Pyramid Schemes and MLM
By: Bill E. Branscum
Copyright 1999

Although the terms “Ponzi” and “Pyramid” are frequently used interchangeably, there is a distinguishable difference between Ponzi Schemes and Pyramid Schemes. They do share common elements, and they are intimately related, but whereas the victims of a Ponzi Scheme are merely victims, those who are victimized in the Pyramid Scheme are also participants in the crime who benefit through their efforts to promote it, and may become criminally culpable and/or civilly liable themselves.

A clear understanding of this distinction may be useful to the investigator who focuses their practice on financial fraud cases. The following articles provide; classic examples of each kind of scam, a comparative analysis, a review of the things an investor should be alert to, a commentary regarding investigative issues and a list of real world cases for your further study and review.

I welcome your comments, questions and suggestions.

© Copyright 2002 - Bill E. Branscum. All Rights Reserved.