Replying to Neon Energy Drink

Hi NS, my roommate has been promoting this "new" energy drink - Neon. It's a class A pyramid scheme. I've warned him but apparently he has received checks from the company. He believes it is just getting going and has been promoting it to bars around the area. However, the only way he makes money is by signing people up..Is this illegal to do? Am I wrong for telling him it's a pyramid scheme if he's making money? Anyone have a bad experience with something like this?