What Laws Do Pyramid Schemes Violate?
Pyramid schemes violate state criminal and civil laws. The Illinois Criminal Code makes it a Class A misdemeanor (prison sentence of one year and $1,000 fine) for any person to knowingly sell, offer to sell, or attempt to sell the right to participate in a pyramid sales scheme. Pyramid schemes also violate the Illinois Consumer Fraud and Deceptive Business Practices Act, which is enforced by the Consumer Fraud Bureau of the Office of the Illinois Attorney General. The law allows the Attorney General to ask the court to impose a civil penalty in the amount of $50,000 per violation.
