Mormon MLM pays $4.75 million settlement.

https://www.sfgate.com/news/article/LuLaRoe-to-pay-4-75M-to-settle-pyramid-scheme-15916680.php

"The California-based multi-level marketing business LuLaRoe is paying $4.75 million to settle allegations from the Washington state Attorney General’s Office that it operated as a pyramid scheme.

Attorney General Bob Ferguson sued the company and its executives two years ago, saying they deceived people about how profitable it was to be a LuLaRoe retailer.

Ferguson said LuLaRoe's structure violated the state's anti-pyramid scheme law, which defines enterprises as pyramid schemes if they offer the opportunity to earn compensation primarily from recruitment, rather than retail sales."

Mormons? A pyramid scheme?
No s***.

https://www.atg.wa.gov/news/news-releases/lularoe-pay-475-million-resolve-ag-ferguson-s-lawsuit-over-pyramid-scheme

Perhaps the judgement was justified. But there is an often-missed life lesson when it comes to MLMs. Every business in America is an MLM. Anyone can start with the CEO of any successful company and draw several circles below them representing individuals who report to them, connected by lines which have yet even more circles below them, etc... And the next thing you know, you've drawn a pyramid that would make any Amway distributor proud. There all matters of debate about why one pyramid is more legitimate than another. But at the end of the day, the people at the bottom of either pyramid make the wealth of the person at the top of the pyramid possible. And generally, the people at the bottom of the pyramid contribute significantly and receive the lowest amount of reward.

So it's all in the details of the organization and its culture and not actual the structure of the organization that that make the organization be either productive or counter productive to the best interests of society. Typically, MLMs are punished by governments over false claims and that is justified if there was mis-representation about the product or about the opportunity. Governments should focus on the mis-representation when punishing the MLM and not on whether the money is being made on retail sales vs recruitment. Any good Entrepreneur will need to recruit skilled recruiters/managers several levels deep, to help him or her build his or her company. And most CEO's and the people that report to them don't transact a majority of the company's retail sales themselves personally. To say something like "well, but those MLMs are just different" might be to say that if a sales organization doesn't manufacture its own goods, then it isn't legitimate, or that sales organizations in-general are not legitimate, nither of which is true. Sales and sales recruitment can be an honorable profession. There are some valuable life lessons and professional skills that can't be gained through other lines of work. Not everyone has an opportunity to go to work as a sales person for a fortune 500 company.

An MLM may do a dis-service to its distributors if they focus on product front-end loading while not enforcing ethical practices as a part of their culture. And that is what they should be punished for. But there is nothing wrong with the pyramid structure itself. Every successful company everywhere has a pyramid structure. People come in at the bottom, they work hard and learn new skills, they make less money in exchange for training. Eventually they either move-up or leave to move-up or leave to start their own companies. But most of us know that we're not likely to start out as an intern and eventually move up to become the CEO. Your opportunity is limited because of the shape of the pyramid. But as with any company, if the company executives deceive people, then they should be punished. But to disparage the pyramid structure itself in a business context, is to limit our personal potential.