MLMs are semi-prevalent and are legal because the pyramid scheme is covered up by selling a product, and often by getting the applicant to sign up as an independent contractor, and each new "branch" or office of the company is actually a completely new LLC, effectively, and legally, a separate entity.
They prey on people looking for work, and lie through their teeth to get as many people as possible.
Some companies are known for using MLMs to sell their services.