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Pyramid Laws by Country
This is provided for
convenience. You should
look up the full text to check
for updates and changes.

 Canada
Competition Act
CHAPTER C-34
 Canada
(French laguage)
Concurrence, Loi sur la
CHAPITRE C-34
 United States(1)
 Federal Code		 Australia
Fair Practices Act
State Laws Concerning Pyramid Schemes
    * Alabama
    *Alaska
     Arizona
     Arkansas
     **California
     Colorado
     Connecticut
     Delaware
     Florida
     Georgia		      Hawaii
     Idaho
     Illinois
     Indiana
     Iowa
     Kansas
     Kentucky
     Louisiana
     Maine
     Maryland
      Massachusetts
     Michigan
     Minnesota
     Mississippi
     Missouri
    * Montana
     Nebraska
     Nevada
     New Hampshire
     ***New Jersey
       New Mexico
     * New York
      North Carolina
      North Dakota
      Ohio
      Oklahoma
      Oregon
      Pennsylvania
      Rhode Island
      South Carolina

       South Dakota
      Tennessee
      Texas
      Utah
     * Vermont
      Virginia
      *Washington
      West Virginia
     * Wisconsin
      Wyoming
(1) Pyramid schemes are tried under the statute for illegal lottery.*Called a "chain distributor scheme" or "chain referral."  **Called an "endless chain."   ***No specific statute.  Link leads to definition of fraud, bookmaking and lottery.

Chain Letter
A Chain letter can be an email, an actual letter, or even a postcard.  It is a communication that requests the user to make copies and send the copies to many other people.  While typically providing false exaggerated claims ("This letter has been around the world 8 times." "Pass this along and you will have good luck." "Disney and Microsoft will award you with gifts for continuing the chain." etc.) They are only annoying and usually started by people who enjoy making fools of others. If the chain requests a reply to an address to prove you sent it to your friends there is usually a sinister reason.  Either to jam an email box full of junk email or to gather email addresses for later mass emailing of commercial offers. (No charity will be helping some poor child based upon the number of email address they get.)

If the chain letter is a postcard with a threat that misfortune will befall those who do not continue the chain, it can be reported to the post office as a threat.  This is not true for letters or emails.

If the Chain letter requests an item of value in return, it can be an illegal pyramid scheme.
Pymarid Scheme
If a business plan earns items of value by introducing others to the business plan who in turn are expected to recruit others to the business plan to earn items of value;  that is a pyramid scheme.  It does not matter if the items of value is called a loan, commission, or gift.  If there is a product involved and it is only used to get members into the plan (four reports, software, web pages etc.) it is still a pyramid scheme.  Multi-Level Marketing is not a pyramid when products are bought to be sold to people who are not members of the plan.
Ponzi Scheme
A plan of fraud where newer contributions are used to pay early members to make it appear there are major earnings. This is normally not a pyramid scheme.  It is still fraud.  Named for Charles Ponzi (1882-1949), who had a popular scheme that paid early investors with money gained from later investors.