The Federal Trade Commission along with numerous state officials announced 33 law enforcement actions against 67 defendants promoting such Internet pyramid schemes. Experts say the Internet has breathed new life into an age-old racket. Va. What distinguishes pyramid schemes from legitimate multilevel marketing ventures is that they focus on recruiting new members, not on selling products, she said. Officials warn that the Internet makes it easy for such fraudulent operations to hide, shut down or move when someone begins to catch on. Well-constructed Web sites might also give the appearance of legitimacy and be more convincing than newspaper advertisements making the same false claims.
Some people just go in and harvest from a newsgroup.
Officials say that as with anything that sounds too good to be true, it probably is.