An investment plan in Shangqiu, Henan Province claims to be able to directly recommend three people to earn 4.5 million. This model is undoubtedly a pyramid scheme. The essence of pyramid schemes is to obtain illegal profits by developing downlines and using the funds of new entrants to pay the returns of early participants. This "Ponzi scheme" model is not sustainable.

The new form of MLM is more covert. It no longer restricts personnel freedom and does not require ID cards or mobile phones. Instead, it is conducted in the name of capital operation. They use material temptations such as luxury cars and gold jewelry to induce people to recruit relatives and friends to join, which ultimately leads to participants losing all their money. This kind of behavior was completely banned as early as 1998. In recent years, government departments such as the Ministry of Education and the Ministry of Public Security have intensified their crackdowns and issued multiple notices to severely punish any form of pyramid schemes, including entrepreneurship, Illegal activities under the banner of employment. For example, in the judgment in May 2018, the amount of cases involving 65 types of "MLM coins" exceeded 10 billion yuan, and the number of victims was tens of millions.

Therefore, if the investment plan in Shangqiu, Henan Province meets the above characteristics of pyramid schemes, then it is illegal, and participants should treat it with caution to avoid falling into the trap of illegally amassing money. Behind any temptation of high returns, there may be hidden risks.