In a letter to the New York Times, in response to a column by Joe Nocera titled The Pyramid Scheme Problem, US Direct Selling Association president Joseph Mariano has written this explanation:
To understand what constitutes a pyramid scheme, Joe Nocera (column, Sept. 15) points to a recent United States Court of Appeals decision that correctly concludes that a scheme exists when recruitment of sales people is at the heart of a company’s business. But the column doesn’t mention that there are additional standards offering useful guidance.
In 2004, the Council of State Governments suggested that every state adopt its model legislation that defines and prosecutes against schemes. The model, or similar legislation, was enacted by 18 states and is notable for its specificity.
We have helped prosecute pyramid schemes over many years and work