PYRAMID schemes are not new. They thrive when times are bad and were prevalent during the Depression years in the US, and more recently in the Soviet Union's transition period.

They work like this: investors place their money in a pyramid scheme on promises of incredibly high interest. Albanian investors were promised a return of 80 per cent a month.

Those who get in early are paid in full so that they can boast of their earnings and attract further investors. They are also actively encouraged to recruit new members.

Later on, still more people get paid their high interest rates but the money is coming from the deposits of new investors and not from professionally managed funds, as confidence tricksters would have their clients believe.

Inevitably, new investments dry up, there is no money to pay the "dividends" and founders of the pyramid scheme, having salted away fortunes for themselves, are left without a cash flow with which to pay their clients.

The most famous recent scheme was in Russia, when Sergei Mavrodi's MMM Pyramid attracted millions of investors.