does us have a law that makes pyramid schemes illegal?
Texas Pyramid Scheme Laws. In Texas, pyramid schemes are against the law. They are considered a type of investment fraud. Many of these schemes are carried out over the internet and e-mail as scams. Texas law makes it a crime to create, prepare, advertise, sell, operate or promote a pyramid promotional scheme. A pyramid promotional scheme is a plan under which an initial investor is promised a large return on a small amount of money. He invests the money and tries to recruit others to join the venture. If he does recruit others, their money will be added into the venture.