The way of earning money as you described in your question is not lawful, and hence you should avoid being involved in such type of investment which is nothing but pure fraud.
Dr. Monzer Kahf, a prominent economist and counselor, states the following: This way of earning money is forbidden in the Shari`ah. You should carefully notice the reason so that you can distinguish between what is permissible and what is not in this kind of commission. The reason for forbidding this kind of earning is that there is nothing that this business offers its customers/members. It is a pure fraud.
If this business were a health club and you pay the fees for becoming a member and getting its services (use of its facilities), and in addition it gives a certain commission if you bring in other members who will pay the fees and get the services, such commissions would be permissible, even if they take the form of a chain that gives a smaller and a smaller commission when the persons you brought it bring other members, and so on. If you get some commodities for the $100 you pay and other members also get commodities, and a commission is given in the process, then it is also permissible.