What is a "Pyramid Scheme" in Palm Springs, California?

Posted by Neil Shouse | May 03, 2016 | 0 Comments


Trying to get rich through a “pyramid scheme” in Palm Springs, California may earn you a few bucks for a while, but it could also earn you a prison sentence for a much longer while.

What is a Pyramid Scheme?

“Pyramid schemes” are business scams in which participants attempt to make money solely by recruiting new participants into the program without ever actually selling anything. They use the money received from new recruits to pay off the earlier participants.

State and Federal Criminal Charges

Pyramid schemes are sometimes called “endless chain” schemes. Like many other states, California has laws that specifically make it a crime to run a pyramid scheme.

Pursuant to California Penal Code Section 327, it is illegal to engage in:

any scheme for the disposal or distribution of property whereby a participant pays a valuable consideration for the chance to receive compensation for introducing one or more additional persons into participation in the scheme or for the chance to receive compensation when a person introduced by the participant introduces a new participant.

A violation of Section 327 is punishable by imprisonment in a county jail not exceeding one year or in state prison for 16 months, two, or three years.

In additional to charges under California law, individuals in Palm Springs charged with running a pyramid scheme can also face a wide range of federal criminal charges, including:

If you have been accused running a pyramid scheme ore “endless chain” scheme in Palm Springs, California, you may be facing multiple criminal charges, each with their own complexities and issues. Our experienced Palm Springs, California criminal defense attorneys understand the law and know how to win. Please call us 24/7 to arrange for your free initial consultation today.

About the Author

Neil Shouse

Southern California DUI Defense attorney Neil Shouse graduated with honors from UC Berkeley and Harvard Law School (and completed additional graduate studies at MIT).


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