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The Pyramid Scheme: A “Devastating Con”

It may be true that you can’t cheat an honest person, but pyramid schemes prove that honest people will enthusiastically cheat others, including family, friends and neighbors. From ten years of study of pyramid schemes, authoring a book, debating on TV and radio, serving as expert in court cases and fielding email from thousands of victims and adherents, I can attest that most people who participate in pyramid schemes are not crooks and liars. The victims and the perpetrators are, for the most part, ethical, spiritually minded, responsible, and law abiding. The city of Columbus, Ohio experienced the spells that pyramid schemes cast over otherwise honest people when Purchase Plus Buyer’s Group swept into town. For each $400 membership in a discount buying club, consumers were promised earnings of $11,000 if they recruited enough others. Ohio Attorney General, Betty D. Montgomery, sued the company for illegal sales practices, and officials in Kansas and Puerto Rico issued cease and desist orders for selling “unregistered securities.” The news media described the sales program as a pyramid scheme destined to collapse. Purchase Plus temporarily closed its doors, leaving at least $100 million owing to 65,000 participants. Yet, during the legal prosecution and media exposes, many local residents continued to attend recruitment rallies.

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