Half-Life Fallout: Why are Ponzi schemes (pyramid schemes) illegal? - Half-Life Fallout

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Why are Ponzi schemes (pyramid schemes) illegal?



Gordon Freeman's Personal Aid

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#1 Posted 29 June 2009 - 06:09 PM

http://www.nytimes.c...adoff.html?_r=1
Madoff just got 150 year in prison for his Ponzi scheme....now my question...why are they illegal?
It seems that the runner just puts themselves in perpetual debt....so why are they illegal? I could only see it breaking a law once someone is not paid once they ask for a return, but if the runner is able to pay out in a timely manner whats the issue?

Ponzi explanation
http://topics.nytime...=nyt-classifier



Gordon Freeman's Personal Aid

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#2 Posted 29 June 2009 - 06:19 PM

Why would they say 150 years instead of life? Sucks he screwed over people I feel really bad for them.
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Poison Piealicious

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#3 Posted 29 June 2009 - 09:13 PM

Why you ask?

Well how about it doesn't actually deliver what is promised. The idea is that the money is invested in a company/concept/deal which will increase that money substantially (though really people should know that when it's to good to be true, IT IS). This off course did not happen. Not only do they loose a lot of their money, most if not all the money is not even invested in something.

Or how about that the money other people invest is used to keep the previous investers thinking the "investment" is actually working out well.

All in all the entire premise is a lie.
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Ivan the Space Biker's Personal Aid

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#4 Posted 29 June 2009 - 09:39 PM

View Postsn00zer, on Jun 29 2009, 06:09 PM, said:

http://www.nytimes.c...adoff.html?_r=1
Madoff just got 150 year in prison for his Ponzi scheme....now my question...why are they illegal?
It seems that the runner just puts themselves in perpetual debt....so why are they illegal? I could only see it breaking a law once someone is not paid once they ask for a return, but if the runner is able to pay out in a timely manner whats the issue?

Ponzi explanation
http://topics.nytime...=nyt-classifier


because nothing is created with it, also, like a pyramid scheme, such systems tend to fail as they grow larger, ultimately benefiting the small group that controls the upper layer and eff'ing everybody below them.
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#5 Posted 29 June 2009 - 10:05 PM

Here you go.
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Combine Elite Pilot

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#6 Posted 29 June 2009 - 10:11 PM

You know, its interesting because many businesses are run like pyramids... one such being Enterprise Rent-a-Car.... as one moves up the food chain, they gain profits from each subsequent subordinate either they bring on or as they are assigned to control. The subordinates below then have X amount of other people below them... and so on and so forth, till you reach the bottom as many of these people were.

I too understand that if promises are made, some must be met, but there is no true "easy money" in this world.



Ivan the Space Biker's Personal Aid

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#7 Posted 29 June 2009 - 10:51 PM

I was once almost recruited into a pyramid scheme. A college friend attempted to make me join in, promising great returns and a money making opportunity of a lifetime.

At the recruitment office (an appartment complex of someone's mom). They stated that their goal was to sell some [obscure] phone service provider which was somehow related to some known "Fortune 500" Company (as if they were truly the same) to compete with the local phone service giants (AT&T, Verizon, Cox Cable)

Anyways, what I caught on initially was that they barely talked about their product and for the next hour they focused on methods to recruit more members as a way to climb up.

It was 250 to join in, 30 dollar commision on selling their product and a whopping 400 on recruiting a new member. All the money was going to be held at a bank that i could cash in at anytime, provided i jumped to the next level.

Then they gave the whole, you keep recruiting and the next level you earn a piece of each sub group, etc.

In the end, i told them I had to think about it and never came back. What convinced me about the scam was that the math didn't make sense and that it was too focused on recruiting than selling.
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G-Man Personal Aid

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#8 Posted 29 June 2009 - 11:46 PM

because it's rare that the rate of return increases or even stays the same as the number of producers increases.

in other words, when you get more players for the same pot, the winnings per person goes down.
Does Gabe Newell ever wonder what life would be like without Gordon Freeman?

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Gordon Freeman's Personal Aid

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#9 Posted 29 June 2009 - 11:49 PM

They're called 'schemes' for a reason.



G-Man Personal Aid

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#10 Posted 30 June 2009 - 07:29 AM

View PostTrooper, on Jun 29 2009, 06:05 PM, said:



The 5th result from the top is the best explanation!



Lady Gaga, incognito

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#11 Posted 30 June 2009 - 07:43 AM

View Postjoshphillips, on Jun 30 2009, 04:19 AM, said:

Why would they say 150 years instead of life?


America takes into account potential vampires.
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Eat my piss.



Ivan the Space Biker's Personal Aid

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#12 Posted 30 June 2009 - 02:48 PM

View PostEatChildren, on Jun 30 2009, 07:43 AM, said:

America takes into account potential vampires.


don't forget about any potential zombies...
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City 17 Civilian

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#13 Posted 11 January 2016 - 04:05 AM

View PostTrooper, on 29 June 2009 - 10:05 PM, said:

Here you go.

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The 5th result from the top is the best explanation!




The 11th result is this very page! (Maybe at the time of the child response, the 5th was this page too and thats what he was saying. Hard to know what Google was thinking 7 years ago).

(Thats why lmgtfy links aren't that great...someone like me 7 years later can land on this page and get and answer like that, that links back to the same page. So helpful!!


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America takes into account potential vampires.


lol!

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