Is the Guardian system a legal pyramid scheme?

Full question:

I have recently come across an opportunity where there are a list of four email addresses. You send five dollars each to the person at the bottom of the list and to the person at the top of the list. Then you replace the email address at the bottom of the list with your email address. The person on the bottom of the list is supposed to get 20 people to sign up for the program and follow the exact same process. You never have to give more than $10.00. You collect five dollars if you are the person on the bottom of the list and five dollars when you become the person on the top of the list. You only have to sign up two people to break even. There are claims that this same program was featured on Oprah. I believe the program is called the 'Guardian' system. Since this involves such a small amount of money and only the bottom person and the top person get paid,could this be considered illegal?

• Category: Debts and Credit
• Date: 04/07/2025
• State: Florida

Answer:

This program may be considered a prohibited chain letter or pyramid scheme. Pyramid schemes require continuous recruitment for success. Participants pay money to those above them in the scheme and must recruit others to receive money. These schemes promise high returns for little effort, relying on new recruits to keep the system going.

In Florida, such schemes are illegal under the law. Specifically, Fla. Stat. § 849.091 states that any group organized to collect fees or dues through a chain process of new members is declared a lottery. Participating in or soliciting for such a group is a first-degree misdemeanor.

Additionally, a 'pyramid sales scheme' is defined as any operation where participants pay to join and can only earn money by recruiting others, rather than through legitimate sales. This is also declared a lottery under Florida law, making participation illegal.

In summary, the Guardian system you described likely falls under these illegal categories.