This looks like a Ponzi Scheme to me.
"A Ponzi Scheme occurs when an investor doesn't receive returns from generated income, but rather from the investment money of other investors. Investors continue to receive their distributions, but since no growth is actually taking place, the broker(s) or firm(s) need funds to satisfy this; these funds usually come in the form of money solicited from later rounds of investors. This process continues until such point that the entire scheme collapses." - Oakes & Fosher LLC Attorne... Read more