Research aims to explain in detail about illegal investments in the form of multi- level marketing (MLM) and explain the role of the Government in managing it. The background of this research is the rise of illegal investment activities in the form of multi-level marketing (MLM) in Indonesia that has claimed many victims and appalling material losses as in the case involving Qnet and PT. Krishna Alam Sejahtera (KAS). This research employed using normative empirical method. Research data is collected by conducting interviews with the OJK (Satgas Waspada Investasi) and Indonesia's Ministry of Commerce, in addition to literature study. The results of the analysis are processed using qualitative methods in which the authors explain narratively. From the results of the study that the author acquired, illegal investments that cover up their heinous activities with multi-level marketing (MLM) activities mostly created a pyramid scheme, by not selling any products and instead maliciously inviting victims to invest and achieve profits every month, unusually expensive registration fees, absurdly high profits, against their will, operating without or invalid permit, and violating the code of ethics. Due to the surge in illegal investment in the form of multi-level marketing (MLM), the Government has set counteract measures. Preventive role the Government has taken is by establishing an investment-vigilant task force consisting of 13 ministries / institutions, besides that the government also issues regulations on multi-level marketing (MLM), and the government also provides education to hinder the public falling into illegal investment. In addition to the preventive role, there is also a repressive role, namely law enforcement, direct handling and sanctions.