Germany uncovers multi-million euro pyramid fraud scheme By Reuters February 19, 20138:47 AM PSTUpdated February 19, 2013 ...

Legally, that's our precedent for a pyramid scheme. So when you look into the company itself, Mytinger & Casselberry, which eventually was neutralized and then was bought by Amway.

The modern pyramid scheme was invented in 1945 in Long Beach, California, by two men: Stanford-educated pop psychologist William Casselberry, and Lee Mytinger, a skilled salesman.

There are also pyramid schemes, which can look a lot like multi-level marketing, but are illegal. According to the Better Business Bureau, there are ways to spot the difference.