In order to continually fill the appetizer level, the party goers are encouraged to invite other friends and acquaintances to attend the parties. A pyramid scheme is a program in which a person receives money primarily from the introduction of other people into the scheme rather than from the sale of goods or services. Pyramid schemes are illegal primarily because simple mathematics dictates that eventually there are not enough new recruits to pay those who paid before them.
Financial loss is inevitable.
Neither providing money to needy recipients, nor disclosing the potential risk of losing one's money, nor 'gifting' the money to avoid tax consequences absolves citizens of their obligation to comply with Idaho's Pyramid Statute. Participants and promoters should be aware that Idaho law provides for both civil and criminal penalties for conducting an illegal pyramid. The Attorney General's Office also warned that, representations by the promoters aside, participants may incur significant tax liability. Consequently, the payments will probably be considered taxable income to the recipients and a tax liability will result. Some callers also reported that they have not been told the location of the parties.