Pyramid and Multi-Level Schemes: A Guide to Recovering Your Money

Pyramid schemes (Ponzi schemes) and unlawful multi-level businesses have boomed with digitalisation and cryptocurrencies. What begins as a "unique investment opportunity" usually ends in the total loss of the capital. As criminal lawyers experienced in fraud offences, we explain how to identify these schemes and what legal action to take.

A Pyramid Scheme or a Legitimate Multi-Level Business?

The difference lies in the source of the profit. In a legitimate multi-level business, the commissions come from the real sale of products. In a pyramid scheme, the money of new investors is used to pay the earlier ones. When the flow of new members stops, the structure collapses.

Warning Signs of a Pyramid Scheme

• Returns promised with no clear underlying activity: nobody can explain what actually generates the profit.
• Income that depends on recruiting: the real reward comes from bringing in new members, not from selling anything.
• Pressure to reinvest: withdrawing money is discouraged, delayed or penalised, while reinvesting is celebrated.
• Opacity about who manages the funds: unidentified administrators, accounts abroad, no audited information.
• Apparent early payments: the first investors do get paid — with the money of those who come after — which is exactly what keeps the scheme credible.

Crypto Scams and 'Rug Pulls'

The crypto market is fertile ground for fraud. "Rug pulls" consist of launching a token, artificially inflating its value and then fleeing with the investors' liquidity. This conduct amounts to aggravated computer fraud. Tracing the destination "cold wallet" is essential for asset recovery, with the help of computer forensic experts.

Steps to Report a Fraud

If you suspect you have been a victim, time is of the essence. Filing a criminal complaint for aggravated fraud (Art. 250 CP) allows precautionary measures to be requested, such as the preventive seizure of the platform's accounts to secure the return of the money.

Acting early matters because the organisers' first move when complaints begin is to dissipate the funds. The criminal route also allows the civil claim to travel inside the same proceedings, so victims can pursue both the conviction and the restitution of what they invested without opening a separate lawsuit.

Evidence You Should Preserve

Before anything disappears, secure every trace of the scheme: contracts and welcome packs, marketing material and screenshots of the platform showing the promised returns, chat and email conversations with promoters, transfer receipts and bank statements, and any wallet addresses used for payments. This material allows the complaint to identify the structure, quantify the loss and support the request for precautionary measures — and identifying other affected investors strengthens the case, since fraud affecting a wide group of people is treated as aggravated.

How Recovery Works in Practice

Recovery depends on two factors: how quickly the assets are located and how much remains when they are. Courts can order platforms and intermediaries to identify account holders and freeze balances, and computer forensic experts can follow the trail of funds — including crypto transfers towards the destination wallets — to support those requests. The realistic objective is to secure whatever assets still exist before they vanish, which is why the precautionary measures requested with the initial complaint are often more important for the victim than the final sentence itself. Every week gained at this stage translates directly into assets that remain recoverable.