Legal Question in Business Law in Texas

Home business

Is a home business legal that: requires you to invest 3,500. Your sponsor gets your first sign up and then starting on your 2nd signup I began to receive the $3,500. It is referred to as cash leveraging. Since there is no product or service sold, is this a legal home business? This company has been doing this for about 6 years. See below for how money is distributed:

1st $3,500 goes to sponsor. I then have a second sign-up to John Doe. John sends me $3,500 Directly. Also any one that John signs up sends me 3,500 for their 1st sign-up. The only thing the company gets is a $120.00 per year fee. The company also sells leads on an optional basis to members.


Asked on 5/31/07, 11:09 am

3 Answers from Attorneys
Peter Bradie Bradie, Bradie & Bradie

Re: Home business

Sounds like an illegal pyramid scheme or worse; a scam to deprive you of $3500.

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Answered on 5/31/07, 11:42 am
Johm Smith tom's

Re: Home business

Scams like this are very common because people want to believe that they can get rich quick without much work. Don't throw your hard earned money away. You're better off buying a lottery ticket.

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Answered on 5/31/07, 11:50 am
Charles Williamson Charles J. Williamson, Attorney At Law

Re: Home business

This is a variation on the old "Ponzi Scheme" - named after the person who first conceived it. These schemes have been carried out through mail, phone and the internet. They are all against the law and have been for some time. Get out of it as quickly as possible.

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Answered on 5/31/07, 12:39 pm


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