Pyramid Scheme (Noun)
Meaning
A fraudulent scheme in which people are recruited to make payments to the person who recruited them while expecting to receive payments from the persons they recruit; when the number of new recruits fails to sustain the hierarchical payment structure the scheme collapses with most of the participants losing the money they put in.
Classification
Nouns denoting cognitive processes and contents.
Examples
- The investment company was shut down after authorities discovered it was running a pyramid scheme that had duped thousands of investors out of their savings.
- She was suspicious of the business opportunity presented to her, realizing it had all the hallmarks of a classic pyramid scheme.
- The magazine warned its readers about the dangers of get-rich-quick propositions that often turned out to be pyramid schemes in disguise.
- After losing his entire life savings in a pyramid scheme, John became an advocate for stricter regulations to prevent such scams.
- The indictment alleged that the defendants had orchestrated a massive pyramid scheme that had bilked investors of millions of dollars over several years.