I am really intrigued with the 1-up concept of cash gifting. I don't question whether the system works or not. It appears that it can work very well, if done correctly. My preliminary research on the subject has raised some doubt as to it's legality. I've heard the argument that you can give a gift to anyone you choose. Nothing illegal there. In fact, the IRS gives clear guidelines validating gifts. However, that's where it seems to end. the FTC and the State's AG seem to have a different take on the subject with this definition: "Pyramid promotional scheme" means a plan or operation by which a person gives consideration for the opportunity to receive compensation that is derived primarily from a person's introduction of other persons to participate in the plan or operation rather than from the sale of a product by a person introduced into the plan or operation. Anyone involved commits a state jail felony. How is cash gifting legal and different from a "pyramid promotional scheme"?