Business endeavors can be confusing; sometimes even seasoned veterans who have been in the business world for a long time can become disoriented from an unusual business deal. If you somehow have become entangled in a business deal that you thought was legitimate, only to find that you are a pawn in the midst of a cunning pyramid scheme, it is important to comprehend your rights in the situation.

In many different cases, a pyramid scheme can have different elements that differentiate a pyramid scheme from a Ponzi scheme. If you were in a pyramid scheme, you might have been convincing others to join your business endeavors; a pyramid scheme starts with one investor who convinces a person or people to start investing in a faulty product. In a Ponzi scheme, the first person who convinces the others to invest more is usually the person who has fraudulent intentions with plans to receive monetary goods from the capital that others invest in the business endeavor.

One of the key elements that might tip someone off that they are involved in a pyramid scheme is an unusually high monetary gain when investing in the product. Someone investing in a pyramid scheme also is usually led to believe that they will eventually receive higher dividends (though at this point the pyramid usually collapses, rendering the investor the loss of even his first investment). Usually, a pyramid scheme works by a person convincing others to join, not by selling the worthless product.

Often times, a pyramid scheme may even be carried out through chain letters; the first chain letter usually convinces the investor to put a small amount of money into the product, claiming that they will receive more than what was invested. The following chain letter convinces the investor to purchase four reports of a reasonable sale amount in order to increase their profit. In a Ponzi scheme, (named after Charles Ponzi, who defrauded people in the early 20th century) a person who is in charge of a pyramid operation tries to make the activity look as legitimate as possible. Yet, according to the US Securities and Exchange Commission (SEC), they must pay off their early investors with their later investor’s money; eventually there is no more money and the operation is done.

In Texas, many different pyramid schemes are carried out through the Internet; one such example is via e-mail scams. In this state, it is illegal to sell or advertise a pyramid scheme; it will also be subject to punitive charges should someone create or prepare an investment that has fraudulent practices which promises a large amount of money for small amount invested. A pyramid scheme in Texas is punished as a state jail felony and can result in up to two years in prison and a $10,000 fine. Should you find yourself in the midst of a business deal and were ignorant of the fraudulent activities; here are the following defenses that might be applicable to your case:

· The scheme was not meant to be a pyramid scheme;

· You did not endorse the pyramid scheme; or

· The product was the main selling point and not the advertisement of the operation or scheme

It may be important to find a skilled criminal defense attorney in order to lessen your sentence or acquit you of a crime for which you may be charged for. If you wish to learn more about pyramid or Ponzi schemes, the Federal Trade Commission (FTC), U.S. Department of Justice, U.S. Secret Service, U.S. Postal Service and Internet Fraud Complaint Center (IFCC) could be able to help you. Contact one of these well trusted services today to learn more about pyramid schemes.