I'm not a regulator or an expert in Ponzi Schemes, but I did find the definition very interesting.
Here is a definition of a Ponzi Scheme from the U.S. Commodity and Futures Trading Commission:
Ponzi Scheme: Named after Charles Ponzi, a man with a remarkable criminal career in the early 20th century, the term has been used to describe pyramid arrangements whereby an enterprise makes payments to investors from the proceeds of a later investment rather than from profits of the underlying business venture, as the investors expected, and gives investors the impression that a legitimate profit-making business or investment opportunity exists, where in fact it is a mere fiction.
Mr. Smith and his staff indicated that they offer a business opportunity; however, they do not make any lifestyle promises based on earning potential. Similarly, he indicated that the only promise the business makes to potential clients is to pay for the recruitment of registered customers and the recruitment of others to do the same.
Sound similar? What do you think?