The pyramid scheme aka "GMI"

Here's the deal, One of my friend told me about GMI. Its a company and its full form is Goldmine International and its website is It is basically a money making scheme. Here's what happens in it, Im guessing most of you already know what is a pyramid scheme but here's a simple explanation.

Lets say i am a Member. To become a member i will have to invest 70$ and buy a crappy watch from GMI. They will open my account after i buy that 70$ watch and now i have to refer people to earn money. Lets say i convince my 2 friends to also sign up. Now in my account a tree will start growing which would have me on top and on the right my one friend and on the left my 2nd friend. As soon as i refer these 2 people i will get 30$ so initially i need 1 person on the right and 1 on the left to get 30$ this is the Motivational step or something like that. Now after this step for every 3 person who join on your right and on your left, You will get 30$. So lets say 3 more people join on the right and 3 more on the left and you will get 30$. You wont have to do anything, The initial friends that you referred they will refer someone else and you will get money. Im having difficulty explaining this so please look at a video for the presentation of GMI over here :

There are more parts of that video so look at them to get an explanation of how it works.

Alot of my friends, and i mean ALOT of my friends have joined this scheme and one of my friends is also asking me to join this scheme. Im pretty reluctant because it looks such an easy way to make money and well my rule is that if its too easy there has to be something wrong in it. So please if you guys have any experience with these sort of Pyramid schemes and if you think they are scam tell me so that i dont waste my 70$.

I looked on google and i read that these sort of schemes are ILLEGAL in USA and other western countries. There must be a reason why they are illegal? Are they scam?

From Page 2, "In fact, pyramid schemes don't work unless somebody loses. Those at the bottom of the pyramid are essentially defrauded by those on top. It's a mathematical fact that no matter how many people join a pyramid scheme, 88 percent of the members will be on the bottom level and will lose their money [source: Pyramid Scheme Alert]. Pyramid schemes are illegal because people don't lose their money due to normal market forces, but because the system requires them to lose so that a few at the top will win."

"Studies show that in a naked pyramid scheme, 90.4 percent of people lose their money, while in product-based pyramid schemes, that number jumps to a shocking 99.88 percent [source: Taylor]."

So, basically you are being asked to defraud your friends.

Alexa shows users come from these countries:

Pakistan 85.7%

Qatar 1.3%

United Arab Emirates 0.8%

Malaysia 0.8%

Other countries 11.5%

So, they seem to be targeting Pakistan

"When we contacted to the goverment of Norway ,We collected enough proofs to prove our points.We sent a email to an high official in norway concerning GMI legitimaticy .In reply they said that they have many registered complaints against GMI and they also warned us not to do any buisness dealing with them"

But how can i be at a disadvantage if i sign up for this, How will i lose money is what i want to know.

Its called MLM i.e, Multi Level Marketing

More here,

So is it haram? Illegal? Ive searched all those sites but i dont really understand if its right or wrong to invest in these sort of things.

It looks like Pyramid Scheme, so it should be both haram and illegal. People who jump in these kind of schemes early on and know how it is working can earn lot but majority end up losing whatever they invest.

Seems like they are targeting people in Pakistan. Who told you about GMI ?

Alot of my friends in Tabani's are joining this scheme and some are making quite a bit of money too.

I told my friend that this maybe haram but he didnt agree because according to him its only a refferal scheme so how can it be haram. I dont know yet if it is haram or not and if it is haram i dont know why it is haram. These schemes are not Illegal in pakistan but illegal in US and Canada i read that on a few websites.. Again i dont know why they are illegal over there.

To be honest, i dont see anything wrong with this scheme but it sounds too good to be true which is why im really trying to find out about it before putting my money in it.. Even if i do make a profit from this thing and it later turns out to be a haram or illegall scheme, That profit will also be haram/illegal.

The guys at the bottom are left with not enough people to recruit and the guys at the bottom are the majority of subscribers, so a very high %age of people will lose money. The guys at the top will make money by defrauding the others, thats why it is unethical and illegal.

If you have no qualms about swindling people below you even though they may be your friends and acquaintances, there are still no guarantees that you will be one of the guys at the top. As a matter of fact, odds are that you will be among the bottom subscribers.

Even though the GMI plan may be available to other countries, look at the alexa rankings, pretty much the clientile (victims) are Pakistanis. How many ppl [with internet access AND who will be willing to spend $70 (<-- I won't and majority won't) AND are willing to trust you], do you know? You will reach saturation point quickly and in al likelihood, I would not be surprised if that critical point has been long long passed.

This is the genius reply by GMI to saturation point (

"Always there is someone to join as you can never reach the whole world and sign them in, world population increases every second, just check out how many new babies are born around world every new second?"

So, please feel free to contact babies but do make sure they are willing to invest $70 on your trust.

Baby Power!!!

You gave the $70 model with $30 for left and right and then other stuff as mentioned in your first post. Again from the GMI site,, this is the potential income for the investment. Scroll down to 3/3 Advance GOLD PLAN on the above link. It is the GMI plan for $30 as mentioned by you.

You spent $70.

You sign up a friend on the right and one on the left. You now have $30. You are still at a $40 loss.

[You and your friends have spent $210 and more than half at least of this $210 will go in the pockets of the scam creators even with the payouts. They are always in obscene profit.]

Your friend on the right gets 2 ppl, Your friend on the left convinces 2 ppl. Look at step 2 on GMI's own chart. You don't make any more money yet. Even now, you are stuck at $30.

Only in the third step, when the 2 new recruits get 2 more ppl apiece to part wth $70, now you will be upto a grand total of $90. A modest profit of $20, and to get that $20 profit, do the math. ALL told, you had to rely on 1+1+2+2+4+4 = 14 new ppl willing to pay $70. Not strangers, but friends or friend/family of friends.

But, look at GMI'S terms and conditions,

Your weekly commission is automatically deposited to your Earned Commission Bank (Statement), however Customers can request for a Telegraphic Transfer (T.T.) or Company's Cheque, the admin fee of minimum US$20.00 for per T.T. or cheque or 4% of amount requested (Which ever is higher) will be deducted from the respective Customer Earned Commission Bank.

Due to a wrong bank or residence address If any T.T. or cheque is returned to GMI, A fee of US$20 for T.T. and US$20 for cheque sent through courier service will be charged for second delivery.

Minimum amount to request for a T.T or Cheque is US $ 500 and Maximum amount allowed per transaction is US $ 3000..

Go to the chart and see how many ppl will need to sign up before you reach $500, the minimum payout, 14+8+8+16+16+32+32 = 126 people all told to get to $630 according to GMI chart.

Look at the how bottom of the pyramid grows 2, 4, 8, 16, 32 and so on. And think about how many people are above you in the pyramid and then think what are the odds that you are the top.

And look at the 32+32=64 ppl at the bottom of "your" pyramid, where are all these 64 people going to find 126 brand new people each, so that they come out with a profit?

Of course, if you trust in babies willing to part with $70, well what can I cay, but I do suspect that when the pyramid collapses, you will have to content with some seriously ticked off infants and many friends who lost money because they trusted you.

In January 1997, a huge number of Albanians were left in tatters after pyramid schemes collapsed and look at the link above, civil war, 2000 Albanians dead.

Bottom Line: Stay Away from this.

Thats a nice post, Explained alot of issues.

For the payement, Well they pay cash weekly and my friends are withdrawing cash on a weekly basis as soon as they earn their commission so i dont understand about the minimum 500$.

That's what their own FAQ and terms and conditions says.

GMI pays commission to customers once a week. You may receive cheque within 2 to 4 weeks after you manually request your commission through Issue Cheque option.

Minimum amount to request a cheque is US$500 (exceptional for some countries).

Yeah but there isnt any minimum amount required to take cash. Hmmmm....

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I looked on google and i read that these sort of schemes are ILLEGAL in USA and other western countries. There must be a reason why they are illegal? Are they scam?

They are illegal in Pakistan as well. See SECP’s warning

This is 2004 list, so it doesn’t mention goldmine; but no question about it, its a pyramid scam.

[quote=", post:, topic:"]

They are illegal in Pakistan as well. See SECP’s warning

This is 2004 list, so it doesn’t mention goldmine; but no question about it, its a pyramid scam.


But GMI is running from 2003.

Also, can you explain the difference in MLM and Network Marketing schemes like GMI? Or are they the same thing? Because my friend says they are totally different

Thank you very very much mtrtmk

Wow, But Gold Mine International is registered by SECP :


By using a MLM cloak, pyramid schemes can get legal cover as in registration etc., but the business model is still mathemtatically impossible, unfair and wrong. Pyramid schemes are illegal in the world, but by masquerading as MLMs, they can enjoy legal status. Not all MLM's are illegal, but there are plenty of pyramids acting as MLMs. Answer this key question, are goldmine more interested in promoting/selling their product or in recruitments? Seems to be, the product is just cover and it is really the recruitments that are the incentive. Are the watches and jewelry the focus or are the recruitments the driving force? If they have been registered since 2003 and if they are a pyramid scheme, where will you be in the pyramid if you join -- the top or bottom? Look at their FAQ on saturation point where they give you hope that babies will bail you out. Eventually, such models collapse. Even if you are receiving commission cash, essentially you are recruiting ‘fresh’ $70 investors for doing so, and the GMI bigwigs are taking an exorbitant profit by these new signings even after paying commission. When the collapse happens, the newest inductees will be left holding nothing.

Here are some tips by Federal Trade Commission about MLMs,

--- Avoid any plan that includes commissions for recruiting additional distributors. It may be an illegal pyramid.

--- Beware of plans that ask new distributors to purchase expensive inventory. These plans can collapse quickly -- and also may be thinly-disguised pyramids.

--- Be cautious of plans that claim you will make money through continued growth of your "downline" -- the commissions on sales made by new distributors you recruit -- rather than through sales of products you make yourself.

--- Beware of plans that claim to sell miracle products or promise enormous earnings. Just because a promoter of a plan makes a claim doesn't mean it's true! Ask the promoter of the plan to substantiate claims with hard evidence.

--- Beware of shills -- "decoy" references paid by a plan's promoter to describe their fictional success in earning money through the plan.

--- Don't pay or sign any contracts in an "opportunity meeting" or any other high-pressure situation. Insist on taking your time to think over a decision to join. Talk it over with your spouse, a knowledgeable friend, an accountant or lawyer.

--- Do your homework! Check with your local Better Business Bureau and state Attorney General about any plan you're considering -- especially when the claims about the product or your potential earnings seem too good to be true.

You say your friends are getting cash payments. Did you ask them how? Minimum cheque or T.T amount mentioned by GMI is $500. So, do they go to an office or someplace? It may show you have $xxx in the digital account, but how do they translate that earning into cash? I googled Tabani, it seems to be a chartered accountancy school. Have you talked to a trustworthy teacher of yours? Sit down with him. Show him the site, explain the model and ask him his opinion.

Alternatively, go ahead and invest. Its your $70 and your friends in the downline. Then, post how much money in actual cash you have in your hand. That way you will know for sure. If you are studying for chartered accountancy, why even bother taking the risk of this investment. Study and work hard and hopefully, the bucks will follow clean and legit. However, if you are worried that your friends are cashing in on a great opportunity and you are missing out, then its up to you make the decision. Invest or walk, your call. Make it as you see fit and face the consequences, good or bad. Make a decision and OWN the decision. If you find out that my opinion costed you an opportunity, don't blame me because the decision to walk or invest is ultimately yours. Listen to advice and opinions and then make YOUR decision.

Yeah tabani is a institute for CA and ACCA students.

Actually im not going to invest in this because i think i have enough evidence with me. Thing is i am trying to convince my friends as well to not waste money in this. Those who have already invested they wont budge, For them its right no matter if it says its illegal on Pak Government website or USA govt website or anything they just dont agree with it.

They say that the cash payment is made at their support center which is somewhere near NIPA.

Also, Can you explain how these schemes can have an impact on Economy like it did in the albania 97 case ?

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Also, Can you explain how these schemes can have an impact on Economy like it did in the albania 97 case ?

Can’t you read on the wikipedia page linked above? Anyway forget albania 97. Look at USA and Europe 2008 and 2009. The global financial crisis was caused by similar frauds perpetuated by american and european banks. They gave loans to people who were not credit worthy and then pawned those debts off on to other suckers.