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Chapter 11. Get Rich Quick > Pyramids in the United States

Pyramids in the United States

To this point, it may be easy to believe that only people inexperienced with capitalism and market-driven economies would be susceptible to the pitch of a pyramid scheme. This is certainly not true. Although the pyramid pitch may need to be more sophisticated to dupe more experienced people, pyramid schemes are alive and well in countries like the United States. The advantage of people in developed countries is not so much their experience with capitalism, but rather the advanced state of the legal system in dealing with securities fraud and the experience of securities regulators. Pyramids get started in the United States, but they usually get shut down before they can have an impact on the economy. However, they frequently last long enough to have an impact on the unfortunate victims of the scheme. Some pyramids are built person-to-person, like the gift clubs in the next section. Examples in the following section show that the Internet is also where pyramids are built.

Gifting as a Pyramid

One of the schemes that has swept the United States is the gifting club. Participants simply “give” gifts to each other. A typical scenario is for you to join the “club” by giving $2,000, which goes to the existing club members. Then you help recruit other members to the club, and you get paid. These clubs commonly try to recruit in groups of eight people; thus, your $2,000 gift will return to you as $16,000 when the new members “join.” When new members can no longer be found, the pyramid collapses and newest contributors don't see any money.


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