What is pyramid fraud?
This is very similar in nature to a Ponzi scheme but uses the investors themselves to recruit new investors into the scheme. There is usually a seemingly credible business and the more recruits the more payments are made and each time the originator gets a cut. Each new recruit is offered huge benefits if the scheme is expanded. The flaw is there is no end benefit. Only the originator, at the top of the pyramid, gets any significant benefit and as the layers of the pyramid gets wider the amount of benefit decreases until those at the bottom end up losing their entire ‘investment’.
When the scheme collapses it may well look to those investigating, with the benefit of hindsight, that all those along the way were knowingly involved in this fraud. That is when you need to robustly defend yourself against these allegations because the vital element the prosecution have to prove is ‘dishonesty’. If you acted honestly in these transactions then you need specialist help to ensure that your defence is advanced in a pro-active way.
Our experienced team of investment fraud lawyers has the expertise and knowledge to look at the required level of detail to defend you. Contact our expert fraud solicitors on 0203 816 9274 or complete our online enquiry form.