Ponzi schemes, also called pyramid schemes, are on the rise. In fact, state and federal authorities uncovered 60 alleged types of Ponzi schemes in 2020, totaling more than $3.25 billion in investor funds. This constitutes the largest amount of money unearthed in these scams since 2010 and more than double the amount from 2018, according to data from the website Ponzitracker.
It seems like it should be obvious when something is a Ponzi scheme, but often companies operate under the disguise of a multi-level marketing company, or MLM, to entice and trap victims. Through these schemes, it is possible for victims to become recruiters, and become part of federal investigations and lawsuits.
In this brief article, our team at The Rickman Law Firm, including a Tampa fraud defense attorney, shares a few important distinctions between a Ponzi scheme and an MLM and what to do if you find yourself involved in a fraud investigation.