pyramid scheme

from The American Heritage® Dictionary of the English Language, 5th Edition.

• noun A fraudulent moneymaking scheme in which early participants are paid out of money received from later recruits, with the final recruits putting money in and getting nothing back.

from Wiktionary, Creative Commons Attribution/Share-Alike License.

• noun An illicit money-making investment scheme whereby early investors are paid primarily or wholly by later investors. Eventually all such schemes fail to the detriment of recent (later) investors.

from WordNet 3.0 Copyright 2006 by Princeton University. All rights reserved.

• noun a fraudulent scheme in which people are recruited to make payments to the person who recruited them while expecting to receive payments from the persons they recruit; when the number of new recruits fails to sustain the hierarchical payment structure the scheme collapses with most of the participants losing the money they put in