A fraudulent moneymaking scheme in which early participants are paid out of money received from later recruits, with the final recruits putting money in and getting nothing back.
A moneymaking scheme in which revenues are derived chiefly by recruiting increasingly larger groups of new salespeople or investors, each of whom pays for the right to recruit others in turn.
An illegal scheme that creates investments that end up having no value. Instead, they are fraudulent. One of the more famous pyramid schemes was the one named after Charles Ponzi: In the late 1920s, it paid investors out of the earnings received from new investors. However, there were no earnings, only new investors; the scheme soon collapsed, but not before many people lost money.
Attributive form of pyramid scheme.