I am led to believe a friend of mine (or former friend) is involved in a pyramid scheme. He is constantly stating how he is making so much money. It is understandable that consumers often have difficulty telling the difference between an illegal pyramid scheme and a legitimate multi-level marketing. If MLM's are not a pyramid scheme, how about they operate like legitimate businesses? Eliminate the bottom. The "Looking for Success" site is one example. Pyramid selling schemes are illegal in New Zealand. The process continues until the base of the pyramid is no longer strong enough to support the upper structure, and there are no more recruits. Why are Pyramid schemes illegal, and what is the punishment for being involved? Since at any given time, most of the members in the scheme are at the bottom, most participants in a pyramid scheme will not make any money.