Oklahoma Pyramid and Ponzi Scheme Laws

Pyramid and Ponzi schemes are both types of investment fraud that are illegal in Oklahoma. Both involve participants paying to join an organization that promises high returns on their investments, but that in reality simply pays out old investors with the membership fees paid by new members. Sometimes, these terms are used interchangeably, but technically the difference between a pyramid and a Ponzi scheme lies in the structure of the scheme.

A classic pyramid scheme starts with one person (the recruiter) who creates a fraudulent business and then convinces members to join by paying a fee. These members are then compensated for recruiting additional members to join the organization. A Ponzi scheme also relies on dues from new members. However, in a Ponzi scheme only the initial recruiter seeks out new members to join. Both of these schemes collapse when they aren't able to recruit enough new members to support the organization.

Common examples of pyramid schemes:

• Mail fraud
• Wire fraud
• Real estate fraud
• Commodities fraud
• Lottery fraud
• Securities fraud

The following chart highlights Oklahoma's main pyramid scheme law.

Civil Liability

Participants who are tricked into joining a pyramid scheme have the option of suing the perpetrator of the scheme in civil court in order to recover the payments they made into the scheme. If the participant wins in court, then the defendant will be required to pay back that participant's payments plus reasonable attorney fees, and costs of the action, minus any money paid to the participant as profit from the pyramid scheme.

Additional Resources

State laws change frequently. For case specific information about Oklahoma's pyramid and Ponzi scheme laws contact a local criminal defense attorney or a consumer protection lawyer.