SEC v. Ashraf Mufareh; and ONPASSIVE LLC, No. 6:23-cv-01539, Middle District of Florida (Aug. 15, 2025) — Complaint

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION

SECURITIES AND EXCHANGE
COMMISSION,

  Plaintiff,

 vs.

Case No. 6:23-cv  -01539-PGB-RMN
ASHRAF MUFAREH AND
ONPASSIVE LLC a/k/a Gofounders
and Ofounders,

  Defendants, and

ASMAHAN MUFAREH

  Relief Defendant.

AMENDED COMPLAINT FOR PERMANENT INJUNCTIVE
AND OTHER RELIEF AND DEMAND FOR A JURY TRIAL

Plaintiff Securities and Exchange Commission (“SEC” or “Commission”)
for its Amended Complaint against Ashraf “Ash” Mufareh (“Mufareh”),
ONPASSIVE LLC (“ONPASSIVE” or the “Company”) (collectively
“Defendants”), and Relief Defendant Asmahan Mufareh alleges   as follows:
SUMMARY
1. This enforcement action arises out of Defendants’   fraudulent and
unregistered offering of securities, in connection with which, among other things,

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Defendants engaged in an illegal pyramid scheme and made materially false and
misleading statements to investors in the United States and around the world.
2.  Beginning in July 2018 to the present (the “Relevant Period”),
Mufareh in his individual capacity and later through ONPASSIVE, an illicit multi-
level marketing (“MLM”) company operating as a pyramid scheme, claimed to be
developing a suite of computer applications using artificial intelligence (“AI”) that
would seamlessly interface with one another in an “ecosystem” similar to
applications offered by established, well-known multinational technology
companies.
3. Ostensibly to finance the development of the applications and the
creation of the ecosystem, from inception through June 22, 2022, Mufareh and
ONPASSIVE, pitched potential investors on the opportunity to buy for $97 a
position in the pyramid structure, locking in their positions before any Launch, as
defined below, of the purported product and before others began buying into the
scheme in the future.
4. Investors taking advantage of this “early bird” promotion―called
“Founders”—were assured a higher placement in the pyramid, and higher returns,
than later investors waiting to buy into the scheme by making a product purchase
and commencing payment of a monthly subscription after product Launch.

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5. In addition to this early bird Founders promotion, Defendants
represented to potential investors that once product Launch occurred, investors and
others would eventually be able to make a one-time initial payment to purchase a
purported product package and then also pay a monthly subscription fee to use the
purported applications. Investors making these payments would, in the case of
Founders, retain placement in, or, in the case of new investors, obtain placement
in, a pyramid structure.  Moreover, investors would be eligible to receive as a
"commission" a portion of monthly subscription fees paid by those placed after
them in the pyramid structure.
6. As the name “ONPASSIVE” implies, Mufareh and ONPASSIVE
promoted the scheme as a “passive” income opportunity by emphasizing that
investors did not have to do anything, other than make a one-time purchase of
product and pay monthly subscription fees and, in the case of Founders, the $97
fee, to receive commissions.
7. Defendants represented that they would engage in a marketing
campaign―once they effected product Launch―to recruit other participants and
direct the traffic to websites ONPASSIVE created for each Founder,  and
participants   joining post-L aunch,  using an automated process.

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8. Mufareh and ONPASSIVE also incentivized participants to recruit as
many other participants as possible,  claiming a  participant’s recruits would be
placed under the participant  and be sources   of commissions paid to the participant.
9. Further, Mufareh and ONPASSIVE incentivized participants to
purchase multiple $97 positions in the pyramid to maximize the number of passive
income streams.  There was no reason an individual would purchase multiple
positions other than to increase the individual’s potential for income.
10. The offer and sale of the opportunity to participate in the
ONPASSIVE pyramid scheme involves   investments of money in a common
enterprise with an expectation of profits to come from the efforts of others.  A s
such the ONPASSIVE opportunity is an investment contract and, therefore, a
security.  The offering and sale of the ONPASSIVE investment contract have
never been registered with the SEC and no exemption from registration applies.
11.    In furtherance of their fraudulent pyramid scheme,  Mufareh and
ONPASSIVE knowingly  and recklessly made repeated materially false and
misleading statements and omissions concerning, among other things:  the timing of
product Launch, which would trigger commission payments; the potential income
to be earned; and the soundness and legality of their operations.
12. In furtherance of their fraudulent pyramid scheme, Mufareh and
ONPASSIVE, to counter negative reviews of them on existing MLM review

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websites, also furtively created counterfeit websites on which ONPASSIVE
personnel, at Mufareh’s direction, then posted internally generated positive reviews
of Mufareh and ONPASSIVE, falsely passing them off as objective, third-party
reviews.
13. Effective June 22, 2022, ONPASSIVE ceased accepting any more
Founder registrations.
14. As of March 2023, ONPASSIVE had received over $108 million from
over 800,000 investors located in the United States and abroad who purchased   over
1.12 million Founders positions, paying $97 for each position in the pyramid
scheme in advance of the supposed product Launch.
15. Having chiefly focused on recruiting investors rather than the
development of the purported AI applications, Mufareh and ONPASSIVE
continuously delayed any “Launch” of the purported AI applications while
claiming that they were being developed or were further along in development than
was actually the case.
16. As of June 30, 2023, ONPASSIVE had not yet launched any product
for a fee or paid any commissions to investors.
17. Rather than commit investor proceeds principally to develop and
commercialize the purported software applications, Mufareh has used investor
funds to further the pyramid scheme and for his and his spouse’s personal use.

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Specifically, Mufareh transferred investors’ funds to his wife, Relief Defendant
Asmahan Mufareh, including transfers into bank account or accounts held jointly
by the Mufarehs or held in Asmahan Mufareh’s name only, or over which
Asmahan Mufareh exercised authority.  In addition, the Mufarehs converted a
co  nsiderable portion of investor funds into crypto assets under their exclusive
personal control.  The Mufarehs then used funds from these accounts for personal
expenses, including online retail purchases, upscale dining, TV subscriptions,
groceries, salon a nd spa visits, and the purchase of stocks.  Asmahan Mufareh does
not have a legitimate claim to the funds transferred from ONPASSIVE or Ashraf
Mufareh.
SUMMARY OF VIOLATIONS
18. By their conduct as alleged in this Amended Complaint, Defendants
each violated the registration provisions of Sections 5(a) and 5(c) of the Securities
Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77e(a) and (c)] and the antifraud
provisions of Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)] and Section
l0(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §
78j(b)] and Rule l0b-5 [17 C.F.R. § 240.l0b-5] thereunder.
19. Moreover, by his conduct as alleged in this Amended Complaint,
Defendant Mufareh had the power to control the general affairs of ONPASSIVE at
the time ONPASSIVE violated the securities laws as alleged herein, and Mufareh

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directly or indirectly possessed the power to direct or cause the direction of the
management and policies of ONPASSIVE, and,  therefore, Mufareh is liable jointly
and severally with and to the same extent as ONPASSIVE for its violation of
Section l0(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule l0b-5 [17 C.F.R. §
240.l0b-5] thereunder, pursuant to Exchange Act Section 20(a) [15 U.S.C. §
78t(a)].
20. Unless Defendants are restrained and enjoined, they are reasonably
likely to continue to engage in the acts, practices, transactions, and courses of
business set forth in this Amended Complaint or in acts, practices, transactions,
and courses of business of similar types and objects.
DEFENDANTS
21. Ashraf “Ash” Mufareh, age 50, is a resident of Orlando, Florida.  He
is    the co  -founder and co-owner with his spouse, Asmahan Mufareh, of
ONPASSIVE and, throughout the Relevant Period, has been its Chief Executive
Officer.  Throughout the Relevant Period, he has wholly controlled all operations
of ONPASSIVE and had ultimate authority over its activities, including the
violative conduct at issue here.
22. ONPASSIVE a/k/a Gofounders and Ofounders, was established as
a   Florida LLC on November 19, 2018, before being converted to a Delaware LLC
on September 23, 2021.  ONPASSIVE has maintained an office in Orlando,

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Florida,  since 2018.  At no time did the company have a category of securities
registered with the SEC.  The names “ONPASSIVE,”  “Gofounders” and
“Ofounders” have been used interchangeably to describe the company that has
purportedly been developing AI applications, and also to describe the Company’s
MLM program.
  All acts and omissions of ONPASSIVE as alleged herein were
done at Mufareh’s direction.

RELIEF DEFENDANT

23. Asmahan Mufareh, age 39, is a resident of Orlando, Florida.  She is
Mufareh’s spouse and the co-founder and co-owner of ONPASSIVE, and she has

received securities fraud proceeds to which she has   no legitimate claim.
TERMS
24. “Founders” Defendants used the term “Founders” to describe
investors who registered on ONPASSIVE’s non-public website “Back Office”
prior to product Launch (or “pre-Launch”) for the opportunity to be placed in a
pyramid structure prior to later investors.  The Defendants claimed that Founders
would be ultimately eligible to receive as a “commission” a portion of monthly
subscription fees paid by those placed after them in the pyramid structure.
ONPASSIVE has purportedly placed each Founder in the pyramid pre-Launch in
the order in which they registered.  Defendants distinguished between Founders
that paid the $97 pre-L aunch versus those that had not yet paid.  The Defendants

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referred to Founders who had not yet paid as holding “free” positions.  The
Defendants represented that they could remove any Founder holding a “free”
position at any time prior to product Launch and indicated that they would
eliminate all such “free” positions prior to product Launch so that only paying
Founders would be eligible to maintain their positions in the pyramid and elect to
be a “Reseller.”  The Defendants ceased accepting Founder registrations on June
22, 2022.
25. “Reseller”    The Defendants required that, in order to receive
commissions,  an investor (whether they be a Founder who registers pre-L aunch or
someone who invests post-Launch) also had to sign up on ONPASSIVE’s Back
Office to be a “Reseller.”  An e-Book posted to ONPASSIVE’s Back Office from
December 2021 into August 2022 stated that every Founder would elect to become
a “Reseller.”  According to Defendants, once having made the election to be a
“Reseller,” the electing person was not required to do anything further.  Rather,
ONPASSIVE stated that it would create a   website for each Reseller and that    upon
product Launch ONPASSIVE would then engage in a marketing campaign to
attract other potential investors or users of the purported product through the
Reseller’s website using AI.  ONPASSIVE said it would treat each purported
product purchase made through a Reseller’s website as a   “resale.”  A portion of the
monthly subscription fees paid by customers routed to each Reseller’s website

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would then be paid as a “commission” to the Reseller.  These resale commissions
would be in addition to the commissions paid out of monthly subscription fees paid
to each Founder by the Founders beneath them in the pyramid.
26. “Leadership Council”     The Defendants used the term “Leadership
Council” to refer to a group of highly productive and enthusiastic Founders
selected by Mufareh to promote ONPASSIVE.
27. “Back Office”  The Defendants used the term “Back Office” to refer
to ONPASSIVE’s non-public website accessible by the over 800,000 investors
who had registered as “Founders,” or who were otherwise granted access by
Mufareh.  It is not a product for commercial sale, but rather a tool used by the
Defendants to, among other things, facilitate and track recruitment efforts.
28. “e-
Book”     The Defendants used the term “e-Book” to refer to a digital
composition, of which there were successive iterations, reviewed and edited by
Mufareh and then posted to ONPASSIVE’s    Back Office with Mufareh’s
authorization, and which contained information concerning ONPASSIVE’s
fraudulent scheme.
29. “Launch”  The Defendants used the term “Launch” through at least
June 22, 2022, to refer to the purported commercial rollout of the product, with all
applications (initially approximately 30 increasing to over 50) comprising the

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ecosystem to be made commercially available simultaneously, coincident with the
commencement of commission payments.
JURISDICTION AND VENUE
30. This Court has jurisdiction over this action pursuant to Sections 20(b),
20(d)(1) and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d) and 77v(a)]
and Sections 21(d)(1), 21(e) and 27(a) of the Exchange Act [15 U.S.C. §§
78u(d)(1), 78u(e) and 78aa(a)].
31. The Court has personal jurisdiction over Defendants and venue is
proper in the Middle District of Florida,  pursuant to Section 22(a) of the Securities
Act [15 U.S.C. § 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. § 78aa],
because certain of the transactions, acts, practices, and courses of business
constituting violations of the federal securities laws occurred within this District.
Defendants offered and sold securities at issue in this District, and individuals who
reside in this District are among those who invested by paying $97 to Defendants
to be Founders.  Furthermore, Defendant Mufareh and Relief Defendant Asmahan
Mufareh reside in this District, and ONPASSIVE’s principal place of business is in
this District.
32. The investments, offered, purchased, and sold as alleged herein were
securities as defined under the Securities Act and the Exchange Act.  In connection
with the conduct alleged in this Amended Complaint, Defendants, directly and

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indirectly, singly or in concert with others, have made use of the means or
instrumentalities of interstate commerce, the means or instruments of
transportation or communication in interstate commerce, the mails, and/or the
facilities of a national securities exchange—namely, through Defendants’ use of
the internet, including for email, the transmittal of live webinars and of the same
webinars and informational e-Books posted to ONPASSIVE’s Back Office.
FACTS

I. THE ONPASSIVE PYRAMID SCHEME
A. ONPASSIVE Is A Pyramid Scheme
33. ONPASSIVE is a pyramid scheme.  ONPASSIVE offers investors,  in
return for their payment of money, the right to promote and sell ONPASSIVE’s
purported product and to receive income not primarily for the sale of the product to
ultimate users, but rather in return for recruiting other participant-recruiters
(investors).  These investors in turn are likewise incentivized to recruit still other
investors in an unending and unsustainable chain of recruitment.  ONPASSIVE’s
incentivized recruitment structure has no method or procedures in place to ensure
that a substantial portion of sales are to bona fide retail users of the product.
34. To earn commissions, an ONPASSIVE investor must purchase
product and commence paying monthly subscription fees, with those paying the
$97 Founder’s fee assured a higher place in the pyramid structure, relative to those

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who do not, so as to maximize their passive income streams.  According to
Defendants, other than making payments and checking a box electing to be a
“Reseller,” no further action by an investor is required to receive a passive income
stream.
35. The purported income opportunity has driven recruitment rather than
the utility of the product.  This is evident from, among other things, Defendants’
successful solicitation of over 800,000 investors worldwide to purchase over 1.12
million Founders positions over the course of four years, during which time
Defendants never commercially launched a single product and devoted their
communications chiefly to describing the income opportunity.  Of these over
800,000 investors, more than 93,000 (nearly 12%) purchased multiple Founders
positions.  Given that each investor could purchase all the product the investor
desired through one position, the purchase by over 93,000 investors of multiple
Founders positions confirms that receipt of passive income is a driver of investor
interest.  Meanwhile details on the products under development remain scant.
36. Most ONPASSIVE investors are bound to lose money. Defendants
claimed in their e-Book that investors could earn unlimited residual income for life
and other marketing materials even indicated that investors could receive over $2
million per month for life; however, such claims depended on the unrealistic
assumptions of infinite numbers of participants in the ONPASSIVE pyramid

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scheme For example, to fully populate ten more levels of the pyramid beyond the
ten levels depicted in paragraph 60 below would require 5.2 billion positions,
assuming the number of positions in each successive tier increases by a factor of
three.  It is not possible to have an infinite team of participants from whom an
investor could earn unlimited residual income for life, as claimed in the e-Book
referenced in paragraph 62 below.
B. The ONPASSIVE Pyramid Scheme Relies on Rewards Unrelated
to the Sale of a Product to Ultimate Users

37. In July 2018, Mufareh, and ONPASSIVE, following its formation in
November 2018, began soliciting investors to invest in ONPASSIVE’s unlawful
pyramid scheme by claiming that Founders would share in profits that would
purportedly come from monthly subscription fees paid by users to use a suite of
online computer applications using AI.  ONPASSIVE has   yet to fully develop and
make   commercially available a suite of online computer applications.
38. Defendants solicited investors,  using email and live webinars, usually
produced from Mufareh’s Orlando home, which were recorded and then posted to
ONPASSIVE’s Back Office for later viewing.
39. ONPASSIVE’s Back Office contained informational e-Books which
Mufareh reviewed,  edited, and authorized to have posted.
40. Anyone registering as a Founder or granted access by Mufareh could
access ONPASSIVE’s Back Office.  Founders who actively promoted

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ONPASSIVE, particularly those comprising ONPASSIVE’s so-called “Leadership
Council,” also disseminated promotional materials on the public internet as part of
their recruitment efforts, which Mufareh and ONPASSIVE incentivized them to do
by representing that each Founder recruited by an existing Founder would be
placed under the existing Founder in the pyramid.
41. ONPASSIVE’s promotional materials falsely conveyed that monies
raised would be used for product development.  The purported product would be a
suite of computer applications using AI to automate marketing functions for online
businesses.
42. In February 2020, Mufareh announced in a webinar posted to
ONPASSIVE’s Back Office that the target audience was being expanded to
include anyone interested in using AI applications.  Between August 2019 and at
least December 2021, the number of computer applications the Defendants claimed
they would launch increased from approximately 30 to over 50.
43. During the Relevant Period, Defendants publicly stated that they
would employ a “Software as a Service” model where, rather than owning the
products outright, customers
1
 would purchase a product package and then pay a
monthly subscription fee to use the products.

1
 The term “customer” as used herein refers generally to any individual who would, under
ONPASSIVE’s envisioned plan, purchase the purported software product.  A customer might
also be a Founder or otherwise participate in the pyramid scheme post-Launch, but not

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44. Investors could purchase placement in ONPASSIVE’s unlawful
pyramid scheme either by paying $97 in advance of the product Launch or by
waiting to purchase a software product on or after product Launch.  Under either
option, Defendants indicated that each investor would be placed in the pyramid in
the order in which each registered.  Defendants assured “Founders” that, as they
were early investors,  the Founders would be placed more highly than those
registering on or after product Launch.  Investors would maintain their respective
positions at or after product Launch provided they made all required payments.
45. An e-Book that Mufareh reviewed, edited, and authorized for posting
to ONPASSIVE’s Back Office in April 2019, declared:
[W]hen you accept an Early Founder Position, you’re placed in OnPassive’s
Top  Leadership.  This  is  the  top  1%  of  the  leaders  in  the  company  and  the
teams  under  these  leaders  are  built  literally  hands-free.  .  .  .  This  is  done
through company-wide marketing campaigns using four or five of the world’s
best/largest data exchange companies to run the campaigns. These campaigns
are  “fed”  using  proprietary  databases,  developed  and  owned  by  OnPassive,
that  consist  of  leads  incredibly  targeted  to  specific  industries.  Before  the
public launch, the primary purpose of the existing Founders and the company
campaigns  are  to  invite  other  Founders.  The  Founders  Positions  are  ranked
according to (1) the date the Position was acquired, and (2) the number of paid
Founders they have personally sponsored.

necessarily so.  At least as of June 30, 2023, ONPASSIVE had yet to sell any products, and had
no paying customers as of that date.

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46. A    visual depiction often used in  promotional materials posted to
ONPASSIVE’s    Back Office and the public internet during the Relevant Period,
advertised the pyramid incentive structure as follows:

47. Defendants generally indicated that the pyramid under each recruit
would be limited to ten rows with the number of positions in each successive row
increasing by a multiple of three, for a maximum of 88,523 positions all told,
although Defendants also occasionally indicated that the number of rows could be
unlimited.  Defendants further represented that the “spillover” concept applied,
meaning that an investor who actively recruits others into the scheme could fill in
vacant pyramid positions anywhere below the active investor in the pyramid to
include positions below investors who were not actively recruiting.

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48. According to Defendants’ promotional materials and communications
with Founders, to maintain one’s position in ONPASSIVE’s pyramid at the time of
purported product Launch, a Founder must have paid a $97 Founder’s fee,
purchased   a   product package,  and paid  a  monthly subscription fee in order to
continue to receive commissions.  The monthly subscription fee was initially
specified as $25-$900, depending on the product package the participant
purchased.  Investors were told in a video posted in the Spring of 2019 to the Back
Office that the $97 Founder’s fee would cover the first year of post-Launch
monthly subscription fees in their entirety.  Those who were not Founders would
need to purchase product packages after Launch to be placed in the pyramid and
pay a monthly subscription fee to maintain a position in the pyramid and receive
commissions.
49. From inception, Defendants claimed that ONPASSIVE would begin
paying commissions upon product Launch, when it began collecting monthly
subscription fees.
50. Defendants permitted investors to register as Founders pre-Launch
while deferring payment to a later date, provided payment was made prior to
product Launch.  Failure to pay the Founder’s fee in advance of Launch would
result in forfeiture of the so  -called “free”   position in the ONPASSIVE pyramid.

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51. By December 2021, Defendants had modified the pyramid scheme
participation requirements i n three respects.  First, the monthly subscription fees
would no longer be in the range of $25-$900, but substantially higher although
unspecified amounts.  Second, a Founder’s $97 initial payment would no longer be
deemed to cover the monthly subscription fees   due during the first year following
product Launch.  Founders would now have to pay a monthly subscription fee.
Finally, in addition to purchasing a product and commencing payment of monthly
subscription fees at the time of a purported product Launch, in order to receive
commissions, an investor―whether a Founder or an individual joining post-
Launch―would also now have to elect to be a “Reseller.”     E lecting to be a
Reseller meant simply checking a box on ONPASSIVE’s website.  The election
could be made at any time at or after product purchase, although ONPASSIVE’s e-
Book posted to the Back Office from December 2021 into August 2022 asserted
that every Founder would elect to be a Reseller.  There was no added cost for
electing to be a “Reseller,” and electing to be a “Reseller” did not obligate the
electing person to do anything.
52. At no time up through June 22, 2022, was a limit placed on the
number of Founder positions that an investor could purchase.  Since a single
Founder’s position would enable an investor to purchase product, the only reason

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for purchasing more than one Founder’s position was to secure multiple passive
income streams.
53. Although ONPASSIVE claimed that it ceased accepting Founder
registrations effective June 22, 2022, Defendants continued to accept $97
payments from those Founders holding “free” positions as of that date, resulting in
the payment of tens of millions of dollars in Founders’ fees subsequent to June 22,
2022.
C. Defendants Promoted Their Pyramid Scheme by Emphasizing the
Passive Income Opportunity through Recruitment

54. Throughout the Relevant Period, Defendants made clear how much an
investor would receive in commissions was directly tied to how high in the
ONPASSIVE pyramid an   investor was placed relative to others, which, in turn,
was a function of how many participants were recruited under them and in
succeeding levels of the pyramid.  Only a Founder could recruit other Founders,
who would then be placed under and be sources of commissions for the recruiting
Founder.
55.  The Defendants represented that on product Launch, ONPASSIVE
would engage in an intensive marketing program to attract new customers and,
using an automated system, direct traffic to websites that they would create for
each Reseller (a Founder or investor who joins post-L aunch).  Individuals directed
to a Reseller’s website who then purchased a   product,  would be deemed a recruit

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of the Reseller.  ONPASSIVE tracked Founders recruited by other Founders and
undertook to track recruits post-L aunch.  Accordingly, Defendants made
recruitment of more Founders and/or Resellers a focal point of their pyramid
scheme from inception.
56. Defendants also urged and incentivized investors to join as early as
possible by emphasizing that the earlier interested parties joined, the more highly
placed they would be in the pyramid relative to later joining participants, and the
more they could earn in passive income from those placed under them.
57. Although Defendants emphasized that participants could maximize
their passive income by recruiting others, Defendants also told investors—whether
Founders or those considering joining later—that they could earn passive income
without engaging in any recruiting activity, but instead relying entirely on
ONPASSIVE to conduct marketing efforts and, post-L aunch, to place recruits
ONPASSIVE solicited directly under existing participants in the pyramid structure.
58. While Defendants initially represented that they would release the
suite of applications for business owners looking to create an online presence to
market their services or products, they also repeatedly represented that investors
did not need to have an already existing business.  Rather, investors could use the
purported product post-L aunch to market the ONPASSIVE program (and,
implicitly,  the passive income making opportunity), thereby populating the

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pyramid under them with new recruits to maximize their own passive income
stream.  Thus, no business use for the product was needed beyond recruiting for
ONPASSIVE, and the investors’ profits would come from the recruitment of
others into the scheme rather than from product sales to bona fide retail purchasers.
59. The most heavily marketed aspect of the fraudulent scheme to attract
investors was not the potential or value of the purported software application
product, but rather the potential size of the income opportunity, about which
Defendants have made multiple and repeated materially misleading claims.
60. For example, Defendants falsely advertised in promotional materials
and live and recorded webinars posted to the Back Office outlandish potential
passive or “residual” returns to investors that could last “for life.”  The payment
grid below, which appeared in ONPASSIVE e-Books   and webinars posted to
ONPASSIVE’s Back Office at least up through late 2020, purports to show how a
participant could receive up to $2,032,614 per month for life.  This number is
based on the unrealistic assumption that ten levels of recruits, comprising 88,573
commission-generating positions of persons buying in at varying levels, would
populate the pyramid under the participant.

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61. Illustrative of how Defendants used this payment grid is a webinar the
Defendants broadcast on September 25, 2018, and then posted to the Company’s
Back Office website.  In the webinar, Mufareh stated that the grid showed how it
was possible for participants to receive over $2 million per month if up to ten tiers
under them were fully populated and suggested that $30 million per month was
feasible if more than ten rows were populated.
62. An e-Book reviewed and edited by Mufareh and posted to
ONPASSIVE’s Back Office with Mufareh’s authorization from December 2021 to

24

August 2022 claimed that a participant could have “an infinite team” of
downstream recruits from which the participant would draw commissions and earn
“unlimited residual income” “for life.”  Elsewhere the same e-Book stated that a
participant could earn thousands and even millions of dollars.
63. Additionally, in February 2020, Mufareh reviewed and approved for
posting in the Back Office a false marketing message from a Founder with
“realistic,” “conservative,” and “worst case” scenarios that projected Founders
would earn over $32 million with the system, and which touted the purported
income benefits of buying multiple positions.
64. Throughout the Relevant Period, Mufareh knew or was reckless in not
knowing that the representations set forth in Paragraphs 59 through 63 concerning
the purported income that could be earned from investing in the ONPASSIVE
pyramid scheme were factually unsupportable and materially misleading.  As
CEO, co-owner, and the ultimate authority over all ONPASSIVE operations and
statements, Mufareh’s scienter is imputable to ONPASSIVE.
65. A reasonable investor would have wanted to know that ONPASSIVE
was a pyramid scheme.
66. A reasonable investor would have wanted to know that ONPASSIVE
was unsustainable and could never deliver on the “passive” or “residual” income
Mufareh and ONPASSIVE promoted to investors.

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67. Throughout the Relevant Period, Mufareh has known or been reckless
in not knowing that ONPASSIVE is a pyramid scheme that has operated and
continues to operate as a fraud or deceit on investors.  Mufareh’s scienter is
imputable to ONPASSIVE.
II. DEFENDANTS MADE MATERIAL MISREPRESENTATIONS IN
FURTHERANCE OF THE PYRAMID SCHEME

68. In addition to those material misrepresentations addressed in
Paragraphs 59 through 63 above, and in furtherance of their pyramid scheme,
Defendants made other materially false and misleading statements or omitted
information which made those statements which were made materially misleading.
A. Defendants Fraudulently Misrepresented that ONPASSIVE was
“Legal” and “Fully Compliant”

69. During the Relevant Period, Defendants misrepresented to investors
that ONPASSIVE was engaged in a legal business when they knew or were
reckless in not knowing that they were operating an unlawful pyramid scheme.
70. Defendants’ misrepresentations were not made in the form of
opinions; rather, they were made as statements of fact, for example:
a. Defendants’ misstatements that ONPASSIVE was engaged in a
legal business were made in webinars dated September 25, 2018, July 18, 2019,
and June 11, 2020, which were posted to the Back Office.

26

b. In a webinar dated August 29, 2019, Mufareh falsely declared
that ONPASSIVE was “legal” in every country in which it operated, or there
would be “workarounds” to make it legal.
c. E-books, which Mufareh reviewed, edited, and authorized for
posting to ONPASSIVE’s Back Office in April 2019 and again in December 2021,
stated “WE ARE FULLY LEGAL-WORLDWIDE”; “WE ARE FULLY
COMPLIANT-WORLDWIDE”; and “WE WILL NOT be shut down by a
government; THEY WILL USE OUR PRODUCTS!”
71. The foregoing misrepresentations were material because a reasonable
investor would want to know if an investment opportunity was illegal in deciding
whether to invest.
72. Mufareh’s entire course of dealings, as alleged in this Amended
Complaint, reflect his awareness that ONPASSIVE is an illegal pyramid scheme.
His scienter is imputable to ONPASSIVE.
B. Defendants Fraudulently Misrepresented the Feasibility and
Timing of Product Launch

73. Mufareh, beginning in July 2018, and ONPASSIVE, following its
formation in November 2018, made material misstatements up through at least
October 2020 regarding the feasibility and timing of the product Launch, while
knowing or being reckless in not knowing that they lacked a factual basis for
making the statements.

27

a. Beginning on July 17, 2018 and continuing through at least
October 2018, Mufareh composed and sent, or directed others to send, hundreds of
emails to potential investors containing the text “I [Mufareh] will send an update
when the program launches in about one month.”
b. On September 25, 2018, Mufareh said in a live webinar, a
recording of which was posted to ONPASSIVE’s Back Office, “We’re closer to
launch, we’re in the second half, maybe the last third, and you do the math ... I
don’t have a date, I’m going to touch up on that respectfully, is it realistic to launch
in the next 30 days?  Very much possible I would say okay.”
c. On October 3, 2018, Mufareh said in a live webinar, a recording
of which was posted to ONPASSIVE’s Back Office, “We are definitely closer to
the launch than when we announced this concept let’s say in the past, so we’re
clearly in the probably last third or quarter maybe.”
d. In a webinar dated April 25, 2019, a recording of which was
posted to ONPASSIVE’s Back Office, Mufareh represented that ONPASSIVE
would be launched or nearly ready to launch by the end of June 2019 (then two
months away), saying, “In June we will have a kick start party in Orlando.  Last
weekend of June.  Celebrate launch or opening whether it’s already open or getting
tested just ready to launch.”

28

e. In a webinar dated March 26, 2020 and posted to
ONPASSIVE’s Back Office, Mufareh stated that “ONPASSIVE is going to launch
... it is everything looking good for 2020.”
f. On August 6, 2020, Mufareh stated in a webinar,  a recording of
which was posted on ONPASSIVE’s Back Office, that,  “ONPASSIVE is
scheduled and set to launch in 2020... 2020....  If we need more time we will let
you know right now.  We don’t feel there’s any uh necessary time to launch....  We
have plenty of time for the remaining portion of unfinished part of ONPASSIVE to
complete it in 2020.”
g. Mufareh thereafter reviewed six emails drafted by members of
ONPASSIVE’s Leadership Council which reiterated Mufareh’s August 6, 2020,
pronouncement that there would be a 2020 launch date, and which were
transmitted via ONPASSIVE’s official email address to prospective and existing
investors on various dates from August 31 through October 31, 2020.
h. In a webinar dated October 15, 2020 and posted to
ONPASSIVE’s Back Office, Mufareh stated that all that was left was “realistically
a few weeks” of testing, saying, “If now we are considered in pre-launch –   how
much more launch you want – like okay just that ribbon cutting?  It will happen.
It’s a done deal in my mind, that’s why I operate as we already have a multi-billion
dollar business in every country on the planet.”

29

74. Each of the foregoing statements was false when made because, first,
Defendants did not have the personnel to develop the applications along the time
lines indicated above; and, second, to the extent Defendants hired personnel and
expended resources, at least up through August 2020, it was chiefly to develop
ONPASSIVE’s Back Office website used for recruiting new investors, tracking
placement in the pyramid structure, and marketing the ONPASSIVE income
opportunity.
75. For example, in July 2018, when Mufareh started making, directly or
indirectly, the first of the statements referenced above that the “program [would]
launch[] in about one month,” Mufareh and Asmahan Mufareh were the only two
persons involved with any aspect of ONPASSIVE’s operations, and neither had
any expertise to develop a suite of computer applications using AI.
76. While Defendants retained an information technology (“IT”)
outsourcing firm in September 2018 and subsequently brought IT personnel in-
house, at Defendants’ direction the IT firm and in-house personnel focused their
efforts, at least during the first two years, on developing ONPASSIVE’s Back
Office for purposes of recruiting investors rather than the software applications
ONPASSIVE was purportedly “launching.”  As mentioned, as of August 2020, the
same month that Defendants an  nounced that the product suite would include 30
software applications that would work together in an “ecosystem,” Defendants had

30

completed only two comparatively simple software applications (an internet
protocol address (“IP”) tracker and a uniform resource locator (“URL”) shortener),
equivalents of which were already readily available to the public online for free.
Defendants had not launched the two software applications, by which Defendants
had stated they meant the commercial launch of the ecosystem comprised of all
applications simultaneously.  Moreover, development of most of the 30
applications that were to comprise the ecosystem had not even commenced by
August 2020.
77. Defendants’ statements about ONPASSIVE’s purported product
Launch were designed to lull investors into believing that a real product Launch
would occur when in fact no such Launch occurred, and no commissions were paid
to Founders as promised.
78. In November 2022, Defendants made available to the general public
four applications, including the IP tracker and URL shortener, all free of charge.
Defendants have since offered two additional applications available to the general
public free of charge.  As of June 30, 2023, the remaining 44 applications had   yet
to be released and t he product “launch,” defined as the commercial offering of
product, which is supposed to prompt the payment of monthly subscription fees
generating commissions, had   yet to occur.

31

79. Defendants’ misrepresentations were material to investors’ decisions
whether to invest because only after the product Launch could investors expect
their first returns in the form of commissions.  The misrepresentations   that a
product Launch would likely occur within specified short timeframes would also
have spurred Founders who held free positions to pay their $97 fees before the
window closed.
80. At the time he made each of the statements set forth in paragraph 73
above, Mufareh knew or was reckless in not knowing that the statements were
materially false and misleading.  Specifically, he knew or was reckless in not
knowing at the time of each statement that development of applications had not yet
started, let alone progressed to the point that product Launch could occur within
the timeframes specified, and that ONPASSIVE lacked the capacity to develop the
applications in the timeframes   specified.  Mufareh’s scienter is imputable to
ONPASSIVE.
C. Defendants Created Counterfeit and Misleading Websites on
Which to Post Fake Independent Third-Party Positive Reviews in
Furtherance of Their Pyramid Scheme

81. In early 2019, pre-existing and independently-operated third-party
MLM review blog websites, “Review Site 1” and “Review Site 2,” posted multiple
negative reviews of the Defendants.
82. Illustrative of the negative reviews were the following:

32

a. On January 7, 2019, Review Site 1 posted that, “there’s
inherently nothing of particular interest with ONPASSIVE.  It’s literally nothing
more than a pyramid scheme launched by a serial scammer.”
b. On or before February 28, 2019, Review Site 2 posted that,
“ONPASSIVE is a scam, and here is our main reason why: No retail products
offered.  Sure the company offers a[ ] [marketing] platform that you can gain
access to, but only as an [MLM] affiliate member.”
83. The Defendants initially responded to the negative reviews by telling
participants to “ignore the haters.”
84. When the negative reviews persisted, however, Mufareh approved in
November 2019 the creation of counterfeit and intentionally misleading websites
mimicking the names and appearances of the above-mentioned existing websites
and the writing and posting on the counterfeit websites of positive reviews of
ONPASSIVE and Mufareh.
a. ONPASSIVE personnel specifically proposed to Mufareh―and
he agreed to the proposal―that they would “us[e] these two [counterfeit] sites as
3
rd
 party site,” “write ... exclusive review[s] on our own brand (just like a 3
rd

persons writing),” and use both counterfeit websites “to influence the people,” with
the “first target assigned [being] to knock down those [review sites] from the
search results.”

33

b. The names of the two counterfeit sites purposely tracked the
names of  existing MLM review websites in their web URL addresses with slightly
altered domain names: the domain extension “.us” of the counterfeit Review Site 1
site differed from the domain extension “.com” of the existing Review S ite   1 , and
the domain name of the counterfeit Review Site 2 differed from that of the existing
Review Site 2 only in the substitution of the singular for the plural of Review Site
2’s name.  Logos appearing at the top of each page of the counterfeit websites
included the text of Review Site 1’s and Review Site 2’s names.
c. In November 2019, Mufareh personally registered the two
counterfeit websites, paying to have the sites registered under the name of a
“domain proxy” to conceal his and ONPASSIVE’s involvement with the websites.
By concealing their involvement, Mufareh and ONPASSIVE sought to deceive
investors into thinking that the reviews posted on the counterfeit sites were
objectively made by independent third parties.
d. As directed by Mufareh, to whom they reported regularly on
their progress, ONPASSIVE personnel set about operating the websites starting in
late 2019 in a manner to mislead visitors as to the sites’ objectivity.  For example,
in the counterfeit Review Site 1 “About” section, ONPASSIVE personnel wrote:
Our only objective is to educate users who are searching for companies [including]
MLM (primary target industry) ... [We] summarize a company’s overall status
and reputation in the market.  These reviews could help any user to identify and

34

decide whether to approach a company or not to for any business or professional
reasons.

e. Further, ONPASSIVE personnel not only posted reviews of
Mufareh and ONPASSIVE, which were uniformly favorable, but also posted
reviews of other programs and advice on MLMs generally,  which tracked third-
party MLM review sites, so as to further the deception.
f. As authorized by Mufareh, ONPASSIVE personnel wrote and
posted seven positive reviews of Mufareh and ONPASSIVE on the counterfeit
Review Site 2
 website between November 2019 and March 2020, seven of which
remained online until at least November 2021, and six of which remained online
until at least October 2022.  One such review, posted on November 30, 2019,
stated, “Do we recommend you to Join ONPASSIVE?  The answer is – YES, we
do recommend you to be part of ONPASSIVE. ... And it’s a scam-free, fully legit
and compliant and has a global presence in more than 100+ countries.”
g. As authorized by Mufareh, ONPASSIVE personnel wrote and
posted six positive reviews of Mufareh and ONPASSIVE on the counterfeit
Review Site 2 between December 2019 and March 2020, which remained posted
online until at least October 2022.  One such review, posted on February 16, 2020,
stated, “Why do I believe that ONPASSIVE is responsible for taking my business
goals to heights, which I never thought I could?  ... With all of these advantages in

35

front of my eyes, I couldn’t stay blind and not plunge into becoming a member of
ONPASSIVE.”
85. The creation of the counterfeit websites and posting of fake positive
reviews of Mufareh and ONPASSIVE acted as a deceit on investors by falsely
purporting to be objective third-party sites and data.  In addition, in omitting to
disclose that the sites and reviews were controlled by ONPASSIVE and its
personnel, the statements made were materially misleading.
86. Mufareh authorized and participated in the creation of the counterfeit
websites and authorized the posting of the internally-generated positive reviews of
himself and ONPASSIVE.
87. Mufareh understood the impact on investors of positive reviews
posted to MLM websites, observing in a June 11, 2020, webinar posted to the Back
Office, for example, that someone who spots a positive review online was more
likely to register for ONPASSIVE and pay the $97 fee to become a Founder.
88. A reasonable investor would have wanted to know that the websites
were counterfeit, that they were owned and controlled by Mufareh and
ONPASSIVE, and that the positive reviews were not independent but instead
written by ONPASSIVE personnel and approved by Mufareh.
89. Mufareh knew or was reckless in not knowing that the creation of the
counterfeit websites and posting of fake positive reviews of Mufareh and

36

ONPASSIVE was a device, scheme or artifice to defraud and operated or would
operate as a fraud or deceit on investors because purporting to be objective third-
party sites and reviews, and that, in omitting to disclose that the sites were created
and operated by ONPASSIVE and that the postings were internally generated by
ONPASSIVE personnel, those statements that were made were materially
misleading as a result because falsely conveying that they were the product of
objective third-parties.
90. Further, Mufareh knew or was reckless in not knowing that the
operation of the pyramid scheme, the creation of the counterfeit websites, and the
material misrepresentations and omissions collectively constituted a scheme to
defraud and operated or would operate as a fraud or deceit on investors.  Mufareh’s
scienter is imputable to ONPASSIVE.
III. DEFENDANTS

ENGAGED IN THE UNREGISTERED OFFER AND
SALE OF SECURITIES

91. Federal securities laws require that those offering or selling securities
disclose certain information by filing a registration statement with the SEC.  This
information allows investors to make informed judgments about whether to
purchase the securities.
92. Mufareh and ONPASSIVE offered and sold opportunities to invest in
a pyramid scheme to the general public, including investors throughout the United
States, and raised at least $108 million in investor proceeds.

37

93. Mufareh and ONPASSIVE pooled these investor funds to operate the
business to include developing and marketing the purported ecosystem of software
applications and make the pyramid opportunity profitable.  Accordingly, investors’
expectations of profit were, and still are, dependent on Mufareh’s and
ONPASSIVE’s ability and supposed efforts to develop the purported product and
make the pyramid opportunity a profitable endeavor.
94. The offer and sale of the opportunity to participate in ONPASSIVE,
which is  a pyramid scheme,  constituted an investment contract and, therefore, a
security.
95. The offer and sale of the opportunity to participate in the
ONPASSIVE pyramid scheme was not registered with the SEC.  No exemption
from registration applied.
IV. DEFENDANTS AND RELIEF DEFENDANT ASMAHAN MUFAREH
RECEIVED INVESTORS’ FUNDS

96. As a result of the foregoing, Defendants had raised in excess of $108
million in illicit proceeds from investors as of March 2023.
97. Ill-gotten gains were received by Defendants from investors through a
variety of different methods, including in crypto assets, cash, check, wire transfers,
and various third-party payment services.  All of these payments went into
accounts which were and/or are subject to Mufareh’s and/or Asmahan Mufareh’s
control.

38

98.  Mufareh and/or Asmahan Mufareh have converted a sizeable quantity
of investors payments into crypto assets, while holding other proceeds in accounts
with financial institutions.  From these proceeds, Mufareh and Asmahan Mufareh
have expended substantial sums on personal expenses, including fine dining,
luxury resort stays, car rentals, day spas, hair salons, martial arts lessons, and
jewelry purchases.
99. Asmahan Mufareh has   received ill-gotten funds, and does not have a
legitimate claim to those funds.
FIRST CLAIM FOR RELIEF
Unregistered Offers and Sales of Securities
in Violation of Securities Act Sections 5(a) and 5(c)

(Against Defendants Ashraf Mufareh and ONPASSIVE)

100. Paragraphs 1, 10, 21-22,  and 91-95 are realleged and incorporated by
reference as though fully set forth herein.
101. Investors in Defendants’ pyramid-structured sales program―as
described in paragraphs 1-17, 24-29 and 32-63―made investments of money in a
common enterprise about which they were led to expect profits from the efforts of
Defendants or third parties.
102. Investors’ subscriptions in the Defendants’ pyramid-structured sales
program constituted investment contracts, which are securities.
103. By engaging in the conduct described above, Defendants, singly and
in concert with others, made use of the means or instruments of transportation or

39

communication in interstate commerce, or of the mails, to offer to sell or to sell
securities, or carried or caused to be carried through the mails or in interstate
commerce, by means or instruments of transportation, securities for the purpose of
sale or for delivery after sale, when no registration statement had been filed or was
in effect as to such securities, and when no exemption from registration was
applicable.

104. By engaging in the conduct described above, Defendants directly or
indirectly violated, and unless enjoined are reasonably likely to continue to violate,
Securities Act Sections 5(a) and 5(c) [15 U.S.C. §§ 77e(a) and 77e(c)].
SECOND CLAIM FOR RELIEF
Fraud in Violation of Securities Act Sections 17(a)(1)-(a)(3)
(Against Defendants Ashraf Mufareh and ONPASSIVE)

105. Paragraphs 1-17, 21-22, 24-29 and 33-99  are realleged and
incorporated by reference as though fully set forth herein.
106. By engaging in the conduct described above, Defendants, in the offer
or sale of any securities by the use of the means or instruments of transportation or
communication in interstate commerce or by use of the mails, directly or
indirectly:
a. knowingly or recklessly employed a device, scheme, or artifice
to defraud as alleged in paragraphs 1-17, 24-29 and 33-99;

40

b. negligently obtained money or property by means of an untrue
statement of a material fact or an omission to state a material fact necessary in
order to make the statements made, in light of the circumstances under which they
were made, not misleading as alleged in paragraphs 1, 11, 12, 37, 41, 46, 51, 52,
54, 57, 60, 63-80 and 84-90; and
c. negligently engaged in a transaction, practice, or course of
business which operated or would operate as a fraud or deceit upon the purchaser
as alleged in paragraphs 1-  17, 24-29 and 33-99.
107. By reason of the foregoing, Defendants violated, and, unless enjoined,
are reasonably likely to continue to violate, Sections 17(a)(1) -  (a)(3) of the
Securities Act [15 U.S.C. § 77q(a)(1) - (a)(3)].

THIRD CLAIM FOR RELIEF
Fraud in Connection with the Purchase or Sale of Securities
in Violation of Exchange Act Section 10(b) and Rules 10b-5(a) -  (c)
Thereunder
(
Against Defendants Ashraf Mufareh and ONPASSIVE)

108. Paragraphs 1-  17, 21-22, 24-29 and 33-99 are realleged and
incorporated by reference as though fully set forth herein.
109. By engaging in the conduct described above, Defendants directly or
indirectly, by use of the means or instrumentalities of interstate commerce, or of
the mails knowingly or recklessly:

41

a. employed a device, scheme, or artifice to defraud as alleged in
paragraphs 1-17, 24-29 and 33-99;
b. made an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading as alleged in
paragraphs 1, 11, 12, 37, 41, 46, 51, 52, 54, 57, 60, 63-80 and 84-90; and
c. engaged in an act, practice, or course of business which
operates or would operate as a fraud or deceit upon any person as alleged in
paragraphs 1-17, 24-29 and 33-99.
110. By engaging in the foregoing misconduct, Defendants violated, and
unless enjoined are reasonably likely to continue to violate, Exchange Act Section
10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5(a) - (c) [17C.F.R. § 240.10b-5(a) - (c)]
thereunder.
FOURTH CLAIM FOR RELIEF
Violation, as a Control Person, of Exchange Act Section 10(b) and Rule
10b-5(a) - (c)
( Against Defendant Ashraf Mufareh)

111. Paragraphs 1-  17, 19, 21-22, 24-29 and 33-99 are realleged and
incorporated by reference as though fully set forth herein. As alleged in paragraphs
1-17, 24-29 and 33-99, ONPASSIVE violated Exchange Act Section 10(b) and
Rule 10b-5(a) - (c).

42

112. At all relevant times, Mufareh controlled ONPASSIVE and was a
culpable participant in its violations of Exchange Act Section 10(b) and Rule 10b-
5(a) - (c).
113. By reason of the foregoing, Mufareh is liable as a controlling person,
pursuant to Exchange Act Section 20(a) [15 U.S.C. § 78t(a)], for ONPASSIVE’S
violations of Exchange Act Section 10(b) and Rules   10b-5(a) - (c) thereunder.

FIFTH CLAIM FOR RELIEF
Unjust Enrichment
(Against  Relief Defendant Asmahan Mufareh)

114. Paragraphs 1-  17, 21-23, 24-29 and 33-99 are realleged and
incorporated by reference as though fully set forth herein.

115.
 Exchange Act Section 21(d)(5) [15 U.S.C. § 78u(d)(5)] states: “In
any action or proceeding brought or instituted by the SEC under any provision
of the securities laws, the SEC may seek, and any Federal court may grant, any
equitable relief that may be appropriate or necessary for the benefit of
investors.”
116.
 As alleged in paragraphs 1-  17, 23-  29 and 33-99, Relief Defendant
Asmahan Mufareh received investor funds and assets that were the proceeds, or
are traceable to the proceeds,
of Defendants’ unlawful activities, and Relief
Defendant
Asmahan Mufareh has no legitimate claims to those proceeds and
gave no consideration for exchange of those funds.

43

117. Relief Defendant Asmahan Mufareh obtained the funds and assets
as part of and in
furtherance of the securities violations alleged in paragraphs
1-  17, 21-22, 24-29 and 33-99, and under circumstances in which it is not just,
equitable, or conscionable for them to retain the funds and assets.  As a
consequence, Relief Defendant
Asmahan Mufareh was unjustly enriched.
RELIEF REQUESTED
WHEREFORE, the SEC respectfully requests the Court find that Defendants
committed the violations charged and that, as a result of these violations,
Defendants and Relief Defendant Asmahan Mufareh received ill-gotten gains; and
enter Final Judgments:
I.
Permanent Injun
ction

Permanently restraining and enjoining Defendants Mufareh and
ONPASSIVE, their officers, agents, servants, employees, attorneys, and all persons
in active concert or participation with them, and each of them, from directly or
indirectly violating the federal securities laws alleged in this Amended Complaint;
and further permanently restraining and enjoining Defendants, their officers,
agents, servants, employees, attorneys, and all persons in active concert or
participation with them, and each of them, from directly or indirectly offering,
operating, or participating in any marketing or sales program in which a participant

44

is compensated or promised compensation solely or primarily for inducing another
person to become a participant in the program, or if such induced person induces
another to become a participant in the program.
II.

Disgorgement with Prejudgment Interest
Ordering Defendants and Relief Defendant Asmahan Mufareh to disgorge
all ill-gotten gains, with prejudgment interest, as a result of the acts or courses of
conduct alleged in this Amended Complaint, with disgorgement from the
Defendants to be on a joint and several basis, pursuant to Exchange Act Section
21(d)(3), (5), and (7) [15 U.S.C. § 78u(d)(3), (5), and (7)].
III.

Civil Money Penalties

Ordering Defendants Mufareh and ONPASSIVE to pay civil money
penalties pursuant to Securities Act Section 20(d) [15 U.S.C. § 77t(d)] and
Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)].
IV.

Officer and Director Bar

Prohibiting Defendant Mufareh from acting as an officer or director of any
issuer that has a class of securities registered pursuant to Section 12 of the
Exchange Act [15 U.S.C. § 78l] or that is required to file reports pursuant to

45

Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)], pursuant to Section
21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)] and Section 20(e) of the
Securities Act [15 U.S.C. § 77t(e)].
V.

Further Relief

Granting such other and further relief as the Court determines to be
necessary and appropriate.
VI.

Retention of Jurisdiction

Further, the SEC respectfully requests the Court retain jurisdiction over this
action and over Defendants in order to implement and carry out the terms of all
orders and decrees that may hereby be entered, or to entertain any suitable
application or motion by the SEC for additional relief within the jurisdiction of this
Court.

46

DEMAND FOR A JURY TRIAL
Pursuant to Rules 38(b) and 39(a) of the Federal Rules of Civil Procedure,
the SEC demands trial by jury on all issues so triable.
     Respectfully submitted,

November 6, 2023    By: /s
/ Michael J. Friedman
Michael J. Friedman
New York Bar # 4297461
Assistant Chief Trial Counsel
(202) 551-7977
[email protected]

Gregory N. Miller
Assistant Chief Trial Counsel
Florida Bar # 0976652
(202) 551-4469
[email protected]

100 F Street, N.E.
Washington, D.C.  20549

Attorneys for Plaintiff
Securities and Exchange Commission

UNITED STATES DISTRICT COURT 
MIDDLE DISTRICT OF FLORIDA 

ORLANDO DIVISION 
 
 

SECURITIES AND EXCHANGE 
COMMISSION, 

 
  Plaintiff, 
 
 vs. 
 

 
 
 
 

Case No. 6:23-cv-01539-PGB-RMN 

ASHRAF MUFAREH AND 
ONPASSIVE LLC a/k/a Gofounders 
and Ofounders, 

 
  Defendants, and 
 

ASMAHAN MUFAREH 
 
  Relief Defendant. 
 

 

 
AMENDED COMPLAINT FOR PERMANENT INJUNCTIVE  
AND OTHER RELIEF AND DEMAND FOR A JURY TRIAL  

 
Plaintiff Securities and Exchange Commission (“SEC” or “Commission”) 

for its Amended Complaint against Ashraf “Ash” Mufareh (“Mufareh”), 

ONPASSIVE LLC (“ONPASSIVE” or the “Company”) (collectively 

“Defendants”), and Relief Defendant Asmahan Mufareh alleges as follows: 

SUMMARY 

1. This enforcement action arises out of Defendants’ fraudulent and 

unregistered offering of securities, in connection with which, among other things, 

Case 6:23-cv-01539-PGB-RMN   Document 26   Filed 11/06/23   Page 1 of 46 PageID 152



2 
 

Defendants engaged in an illegal pyramid scheme and made materially false and 

misleading statements to investors in the United States and around the world.    

2.  Beginning in July 2018 to the present (the “Relevant Period”), 

Mufareh in his individual capacity and later through ONPASSIVE, an illicit multi-

level marketing (“MLM”) company operating as a pyramid scheme, claimed to be 

developing a suite of computer applications using artificial intelligence (“AI”) that 

would seamlessly interface with one another in an “ecosystem” similar to 

applications offered by established, well-known multinational technology 

companies.   

3. Ostensibly to finance the development of the applications and the 

creation of the ecosystem, from inception through June 22, 2022, Mufareh and 

ONPASSIVE, pitched potential investors on the opportunity to buy for $97 a 

position in the pyramid structure, locking in their positions before any Launch, as 

defined below, of the purported product and before others began buying into the 

scheme in the future.   

4. Investors taking advantage of this “early bird” promotion―called 

“Founders”—were assured a higher placement in the pyramid, and higher returns, 

than later investors waiting to buy into the scheme by making a product purchase 

and commencing payment of a monthly subscription after product Launch. 

Case 6:23-cv-01539-PGB-RMN   Document 26   Filed 11/06/23   Page 2 of 46 PageID 153



3 
 

5. In addition to this early bird Founders promotion, Defendants 

represented to potential investors that once product Launch occurred, investors and 

others would eventually be able to make a one-time initial payment to purchase a 

purported product package and then also pay a monthly subscription fee to use the 

purported applications. Investors making these payments would, in the case of 

Founders, retain placement in, or, in the case of new investors, obtain placement 

in, a pyramid structure.  Moreover, investors would be eligible to receive as a 

"commission" a portion of monthly subscription fees paid by those placed after 

them in the pyramid structure.   

6. As the name “ONPASSIVE” implies, Mufareh and ONPASSIVE 

promoted the scheme as a “passive” income opportunity by emphasizing that 

investors did not have to do anything, other than make a one-time purchase of 

product and pay monthly subscription fees and, in the case of Founders, the $97 

fee, to receive commissions.   

7. Defendants represented that they would engage in a marketing 

campaign―once they effected product Launch―to recruit other participants and 

direct the traffic to websites ONPASSIVE created for each Founder, and 

participants joining post-Launch, using an automated process.   

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8. Mufareh and ONPASSIVE also incentivized participants to recruit as 

many other participants as possible, claiming a participant’s recruits would be 

placed under the participant and be sources of commissions paid to the participant.   

9. Further, Mufareh and ONPASSIVE incentivized participants to 

purchase multiple $97 positions in the pyramid to maximize the number of passive 

income streams.  There was no reason an individual would purchase multiple 

positions other than to increase the individual’s potential for income. 

10. The offer and sale of the opportunity to participate in the 

ONPASSIVE pyramid scheme involves investments of money in a common 

enterprise with an expectation of profits to come from the efforts of others.  As 

such the ONPASSIVE opportunity is an investment contract and, therefore, a 

security.  The offering and sale of the ONPASSIVE investment contract have 

never been registered with the SEC and no exemption from registration applies.  

11.   In furtherance of their fraudulent pyramid scheme, Mufareh and 

ONPASSIVE knowingly  and recklessly made repeated materially false and 

misleading statements and omissions concerning, among other things: the timing of 

product Launch, which would trigger commission payments; the potential income 

to be earned; and the soundness and legality of their operations.   

12. In furtherance of their fraudulent pyramid scheme, Mufareh and 

ONPASSIVE, to counter negative reviews of them on existing MLM review 

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websites, also furtively created counterfeit websites on which ONPASSIVE 

personnel, at Mufareh’s direction, then posted internally generated positive reviews 

of Mufareh and ONPASSIVE, falsely passing them off as objective, third-party 

reviews.    

13. Effective June 22, 2022, ONPASSIVE ceased accepting any more 

Founder registrations.     

14. As of March 2023, ONPASSIVE had received over $108 million from 

over 800,000 investors located in the United States and abroad who purchased over 

1.12 million Founders positions, paying $97 for each position in the pyramid 

scheme in advance of the supposed product Launch.         

15. Having chiefly focused on recruiting investors rather than the 

development of the purported AI applications, Mufareh and ONPASSIVE 

continuously delayed any “Launch” of the purported AI applications while 

claiming that they were being developed or were further along in development than 

was actually the case.   

16. As of June 30, 2023, ONPASSIVE had not yet launched any product 

for a fee or paid any commissions to investors.   

17. Rather than commit investor proceeds principally to develop and 

commercialize the purported software applications, Mufareh has used investor 

funds to further the pyramid scheme and for his and his spouse’s personal use.  

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Specifically, Mufareh transferred investors’ funds to his wife, Relief Defendant 

Asmahan Mufareh, including transfers into bank account or accounts held jointly 

by the Mufarehs or held in Asmahan Mufareh’s name only, or over which 

Asmahan Mufareh exercised authority.  In addition, the Mufarehs converted a 

considerable portion of investor funds into crypto assets under their exclusive 

personal control.  The Mufarehs then used funds from these accounts for personal 

expenses, including online retail purchases, upscale dining, TV subscriptions, 

groceries, salon and spa visits, and the purchase of stocks.  Asmahan Mufareh does 

not have a legitimate claim to the funds transferred from ONPASSIVE or Ashraf 

Mufareh.   

SUMMARY OF VIOLATIONS 

18. By their conduct as alleged in this Amended Complaint, Defendants 

each violated the registration provisions of Sections 5(a) and 5(c) of the Securities 

Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77e(a) and (c)] and the antifraud 

provisions of Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)] and Section 

l0(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 

78j(b)] and Rule l0b-5 [17 C.F.R. § 240.l0b-5] thereunder.   

19. Moreover, by his conduct as alleged in this Amended Complaint, 

Defendant Mufareh had the power to control the general affairs of ONPASSIVE at 

the time ONPASSIVE violated the securities laws as alleged herein, and Mufareh 

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directly or indirectly possessed the power to direct or cause the direction of the 

management and policies of ONPASSIVE, and, therefore, Mufareh is liable jointly 

and severally with and to the same extent as ONPASSIVE for its violation of 

Section l0(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule l0b-5 [17 C.F.R. § 

240.l0b-5] thereunder, pursuant to Exchange Act Section 20(a) [15 U.S.C. § 

78t(a)]. 

20. Unless Defendants are restrained and enjoined, they are reasonably 

likely to continue to engage in the acts, practices, transactions, and courses of 

business set forth in this Amended Complaint or in acts, practices, transactions, 

and courses of business of similar types and objects. 

DEFENDANTS 

21. Ashraf “Ash” Mufareh, age 50, is a resident of Orlando, Florida.  He 

is the co-founder and co-owner with his spouse, Asmahan Mufareh, of 

ONPASSIVE and, throughout the Relevant Period, has been its Chief Executive 

Officer.  Throughout the Relevant Period, he has wholly controlled all operations 

of ONPASSIVE and had ultimate authority over its activities, including the 

violative conduct at issue here.  

22. ONPASSIVE a/k/a Gofounders and Ofounders, was established as 

a Florida LLC on November 19, 2018, before being converted to a Delaware LLC 

on September 23, 2021.  ONPASSIVE has maintained an office in Orlando, 

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Florida, since 2018.  At no time did the company have a category of securities 

registered with the SEC.  The names “ONPASSIVE,” “Gofounders” and 

“Ofounders” have been used interchangeably to describe the company that has 

purportedly been developing AI applications, and also to describe the Company’s 

MLM program.  All acts and omissions of ONPASSIVE as alleged herein were 

done at Mufareh’s direction. 

RELIEF DEFENDANT 
 

23. Asmahan Mufareh, age 39, is a resident of Orlando, Florida.  She is 

Mufareh’s spouse and the co-founder and co-owner of ONPASSIVE, and she has 

received securities fraud proceeds to which she has no legitimate claim. 

TERMS 

24. “Founders” Defendants used the term “Founders” to describe 

investors who registered on ONPASSIVE’s non-public website “Back Office” 

prior to product Launch (or “pre-Launch”) for the opportunity to be placed in a 

pyramid structure prior to later investors.  The Defendants claimed that Founders 

would be ultimately eligible to receive as a “commission” a portion of monthly 

subscription fees paid by those placed after them in the pyramid structure.  

ONPASSIVE has purportedly placed each Founder in the pyramid pre-Launch in 

the order in which they registered.  Defendants distinguished between Founders 

that paid the $97 pre-Launch versus those that had not yet paid.  The Defendants 

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referred to Founders who had not yet paid as holding “free” positions.  The 

Defendants represented that they could remove any Founder holding a “free” 

position at any time prior to product Launch and indicated that they would 

eliminate all such “free” positions prior to product Launch so that only paying 

Founders would be eligible to maintain their positions in the pyramid and elect to 

be a “Reseller.”  The Defendants ceased accepting Founder registrations on June 

22, 2022.  

25. “Reseller”  The Defendants required that, in order to receive 

commissions, an investor (whether they be a Founder who registers pre-Launch or 

someone who invests post-Launch) also had to sign up on ONPASSIVE’s Back 

Office to be a “Reseller.”  An e-Book posted to ONPASSIVE’s Back Office from 

December 2021 into August 2022 stated that every Founder would elect to become 

a “Reseller.”  According to Defendants, once having made the election to be a 

“Reseller,” the electing person was not required to do anything further.  Rather, 

ONPASSIVE stated that it would create a website for each Reseller and that upon 

product Launch ONPASSIVE would then engage in a marketing campaign to 

attract other potential investors or users of the purported product through the 

Reseller’s website using AI.  ONPASSIVE said it would treat each purported 

product purchase made through a Reseller’s website as a “resale.”  A portion of the 

monthly subscription fees paid by customers routed to each Reseller’s website 

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would then be paid as a “commission” to the Reseller.  These resale commissions 

would be in addition to the commissions paid out of monthly subscription fees paid 

to each Founder by the Founders beneath them in the pyramid.       

26. “Leadership Council”  The Defendants used the term “Leadership 

Council” to refer to a group of highly productive and enthusiastic Founders 

selected by Mufareh to promote ONPASSIVE. 

27. “Back Office”  The Defendants used the term “Back Office” to refer 

to ONPASSIVE’s non-public website accessible by the over 800,000 investors 

who had registered as “Founders,” or who were otherwise granted access by 

Mufareh.  It is not a product for commercial sale, but rather a tool used by the 

Defendants to, among other things, facilitate and track recruitment efforts. 

28. “e-Book”  The Defendants used the term “e-Book” to refer to a digital 

composition, of which there were successive iterations, reviewed and edited by 

Mufareh and then posted to ONPASSIVE’s Back Office with Mufareh’s 

authorization, and which contained information concerning ONPASSIVE’s 

fraudulent scheme.  

29. “Launch”  The Defendants used the term “Launch” through at least 

June 22, 2022, to refer to the purported commercial rollout of the product, with all 

applications (initially approximately 30 increasing to over 50) comprising the 

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ecosystem to be made commercially available simultaneously, coincident with the 

commencement of commission payments. 

JURISDICTION AND VENUE 

30. This Court has jurisdiction over this action pursuant to Sections 20(b), 

20(d)(1) and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d) and 77v(a)] 

and Sections 21(d)(1), 21(e) and 27(a) of the Exchange Act [15 U.S.C. §§ 

78u(d)(1), 78u(e) and 78aa(a)].   

31. The Court has personal jurisdiction over Defendants and venue is 

proper in the Middle District of Florida, pursuant to Section 22(a) of the Securities 

Act [15 U.S.C. § 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. § 78aa], 

because certain of the transactions, acts, practices, and courses of business 

constituting violations of the federal securities laws occurred within this District.  

Defendants offered and sold securities at issue in this District, and individuals who 

reside in this District are among those who invested by paying $97 to Defendants 

to be Founders.  Furthermore, Defendant Mufareh and Relief Defendant Asmahan 

Mufareh reside in this District, and ONPASSIVE’s principal place of business is in 

this District. 

32. The investments, offered, purchased, and sold as alleged herein were 

securities as defined under the Securities Act and the Exchange Act.  In connection 

with the conduct alleged in this Amended Complaint, Defendants, directly and 

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indirectly, singly or in concert with others, have made use of the means or 

instrumentalities of interstate commerce, the means or instruments of 

transportation or communication in interstate commerce, the mails, and/or the 

facilities of a national securities exchange—namely, through Defendants’ use of 

the internet, including for email, the transmittal of live webinars and of the same 

webinars and informational e-Books posted to ONPASSIVE’s Back Office. 

FACTS 
 

I. THE ONPASSIVE PYRAMID SCHEME 

A. ONPASSIVE Is A Pyramid Scheme  

33. ONPASSIVE is a pyramid scheme.  ONPASSIVE offers investors, in 

return for their payment of money, the right to promote and sell ONPASSIVE’s 

purported product and to receive income not primarily for the sale of the product to 

ultimate users, but rather in return for recruiting other participant-recruiters 

(investors).  These investors in turn are likewise incentivized to recruit still other 

investors in an unending and unsustainable chain of recruitment.  ONPASSIVE’s 

incentivized recruitment structure has no method or procedures in place to ensure 

that a substantial portion of sales are to bona fide retail users of the product.   

34. To earn commissions, an ONPASSIVE investor must purchase 

product and commence paying monthly subscription fees, with those paying the 

$97 Founder’s fee assured a higher place in the pyramid structure, relative to those 

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who do not, so as to maximize their passive income streams.  According to 

Defendants, other than making payments and checking a box electing to be a 

“Reseller,” no further action by an investor is required to receive a passive income 

stream.  

35. The purported income opportunity has driven recruitment rather than 

the utility of the product.  This is evident from, among other things, Defendants’ 

successful solicitation of over 800,000 investors worldwide to purchase over 1.12 

million Founders positions over the course of four years, during which time 

Defendants never commercially launched a single product and devoted their 

communications chiefly to describing the income opportunity.  Of these over 

800,000 investors, more than 93,000 (nearly 12%) purchased multiple Founders 

positions.  Given that each investor could purchase all the product the investor 

desired through one position, the purchase by over 93,000 investors of multiple 

Founders positions confirms that receipt of passive income is a driver of investor 

interest.  Meanwhile details on the products under development remain scant.   

36. Most ONPASSIVE investors are bound to lose money. Defendants 

claimed in their e-Book that investors could earn unlimited residual income for life 

and other marketing materials even indicated that investors could receive over $2 

million per month for life; however, such claims depended on the unrealistic 

assumptions of infinite numbers of participants in the ONPASSIVE pyramid 

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scheme For example, to fully populate ten more levels of the pyramid beyond the 

ten levels depicted in paragraph 60 below would require 5.2 billion positions, 

assuming the number of positions in each successive tier increases by a factor of 

three.  It is not possible to have an infinite team of participants from whom an 

investor could earn unlimited residual income for life, as claimed in the e-Book 

referenced in paragraph 62 below.   

B. The ONPASSIVE Pyramid Scheme Relies on Rewards Unrelated 
to the Sale of a Product to Ultimate Users   

 
37. In July 2018, Mufareh, and ONPASSIVE, following its formation in 

November 2018, began soliciting investors to invest in ONPASSIVE’s unlawful 

pyramid scheme by claiming that Founders would share in profits that would 

purportedly come from monthly subscription fees paid by users to use a suite of 

online computer applications using AI.  ONPASSIVE has yet to fully develop and 

make commercially available a suite of online computer applications.      

38. Defendants solicited investors, using email and live webinars, usually 

produced from Mufareh’s Orlando home, which were recorded and then posted to 

ONPASSIVE’s Back Office for later viewing.   

39. ONPASSIVE’s Back Office contained informational e-Books which 

Mufareh reviewed, edited, and authorized to have posted.   

40. Anyone registering as a Founder or granted access by Mufareh could 

access ONPASSIVE’s Back Office.  Founders who actively promoted 

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ONPASSIVE, particularly those comprising ONPASSIVE’s so-called “Leadership 

Council,” also disseminated promotional materials on the public internet as part of 

their recruitment efforts, which Mufareh and ONPASSIVE incentivized them to do 

by representing that each Founder recruited by an existing Founder would be 

placed under the existing Founder in the pyramid.    

41. ONPASSIVE’s promotional materials falsely conveyed that monies 

raised would be used for product development.  The purported product would be a 

suite of computer applications using AI to automate marketing functions for online 

businesses.   

42. In February 2020, Mufareh announced in a webinar posted to 

ONPASSIVE’s Back Office that the target audience was being expanded to 

include anyone interested in using AI applications.  Between August 2019 and at 

least December 2021, the number of computer applications the Defendants claimed 

they would launch increased from approximately 30 to over 50.       

43. During the Relevant Period, Defendants publicly stated that they 

would employ a “Software as a Service” model where, rather than owning the 

products outright, customers1 would purchase a product package and then pay a 

monthly subscription fee to use the products.   

 
1 The term “customer” as used herein refers generally to any individual who would, under 

ONPASSIVE’s envisioned plan, purchase the purported software product.  A customer might 
also be a Founder or otherwise participate in the pyramid scheme post-Launch, but not 

 

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44. Investors could purchase placement in ONPASSIVE’s unlawful 

pyramid scheme either by paying $97 in advance of the product Launch or by 

waiting to purchase a software product on or after product Launch.  Under either 

option, Defendants indicated that each investor would be placed in the pyramid in 

the order in which each registered.  Defendants assured “Founders” that, as they 

were early investors, the Founders would be placed more highly than those 

registering on or after product Launch.  Investors would maintain their respective 

positions at or after product Launch provided they made all required payments.      

45. An e-Book that Mufareh reviewed, edited, and authorized for posting 

to ONPASSIVE’s Back Office in April 2019, declared: 

[W]hen you accept an Early Founder Position, you’re placed in OnPassive’s 
Top Leadership. This is the top 1% of the leaders in the company and the 
teams under these leaders are built literally hands-free. . . . This is done 
through company-wide marketing campaigns using four or five of the world’s 
best/largest data exchange companies to run the campaigns. These campaigns 
are “fed” using proprietary databases, developed and owned by OnPassive, 
that consist of leads incredibly targeted to specific industries. Before the 
public launch, the primary purpose of the existing Founders and the company 
campaigns are to invite other Founders. The Founders Positions are ranked 
according to (1) the date the Position was acquired, and (2) the number of paid 
Founders they have personally sponsored. 
 

 
necessarily so.  At least as of June 30, 2023, ONPASSIVE had yet to sell any products, and had 
no paying customers as of that date.  

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46. A visual depiction often used in promotional materials posted to 

ONPASSIVE’s Back Office and the public internet during the Relevant Period, 

advertised the pyramid incentive structure as follows: 

 

47. Defendants generally indicated that the pyramid under each recruit 

would be limited to ten rows with the number of positions in each successive row 

increasing by a multiple of three, for a maximum of 88,523 positions all told, 

although Defendants also occasionally indicated that the number of rows could be 

unlimited.  Defendants further represented that the “spillover” concept applied, 

meaning that an investor who actively recruits others into the scheme could fill in 

vacant pyramid positions anywhere below the active investor in the pyramid to 

include positions below investors who were not actively recruiting.   

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48. According to Defendants’ promotional materials and communications 

with Founders, to maintain one’s position in ONPASSIVE’s pyramid at the time of 

purported product Launch, a Founder must have paid a $97 Founder’s fee, 

purchased a product package, and paid a monthly subscription fee in order to 

continue to receive commissions.  The monthly subscription fee was initially 

specified as $25-$900, depending on the product package the participant 

purchased.  Investors were told in a video posted in the Spring of 2019 to the Back 

Office that the $97 Founder’s fee would cover the first year of post-Launch 

monthly subscription fees in their entirety.  Those who were not Founders would 

need to purchase product packages after Launch to be placed in the pyramid and 

pay a monthly subscription fee to maintain a position in the pyramid and receive 

commissions.   

49. From inception, Defendants claimed that ONPASSIVE would begin 

paying commissions upon product Launch, when it began collecting monthly 

subscription fees. 

50. Defendants permitted investors to register as Founders pre-Launch 

while deferring payment to a later date, provided payment was made prior to 

product Launch.  Failure to pay the Founder’s fee in advance of Launch would 

result in forfeiture of the so-called “free” position in the ONPASSIVE pyramid.  

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51. By December 2021, Defendants had modified the pyramid scheme 

participation requirements in three respects.  First, the monthly subscription fees 

would no longer be in the range of $25-$900, but substantially higher although 

unspecified amounts.  Second, a Founder’s $97 initial payment would no longer be 

deemed to cover the monthly subscription fees due during the first year following 

product Launch.  Founders would now have to pay a monthly subscription fee.  

Finally, in addition to purchasing a product and commencing payment of monthly 

subscription fees at the time of a purported product Launch, in order to receive 

commissions, an investor―whether a Founder or an individual joining post-

Launch―would also now have to elect to be a “Reseller.”  Electing to be a 

Reseller meant simply checking a box on ONPASSIVE’s website.  The election 

could be made at any time at or after product purchase, although ONPASSIVE’s e-

Book posted to the Back Office from December 2021 into August 2022 asserted 

that every Founder would elect to be a Reseller.  There was no added cost for 

electing to be a “Reseller,” and electing to be a “Reseller” did not obligate the 

electing person to do anything.   

52. At no time up through June 22, 2022, was a limit placed on the 

number of Founder positions that an investor could purchase.  Since a single 

Founder’s position would enable an investor to purchase product, the only reason 

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for purchasing more than one Founder’s position was to secure multiple passive 

income streams.   

53. Although ONPASSIVE claimed that it ceased accepting Founder 

registrations effective June 22, 2022, Defendants continued to accept $97 

payments from those Founders holding “free” positions as of that date, resulting in 

the payment of tens of millions of dollars in Founders’ fees subsequent to June 22, 

2022.    

C. Defendants Promoted Their Pyramid Scheme by Emphasizing the 
Passive Income Opportunity through Recruitment  

   
54. Throughout the Relevant Period, Defendants made clear how much an 

investor would receive in commissions was directly tied to how high in the 

ONPASSIVE pyramid an investor was placed relative to others, which, in turn, 

was a function of how many participants were recruited under them and in 

succeeding levels of the pyramid.  Only a Founder could recruit other Founders, 

who would then be placed under and be sources of commissions for the recruiting 

Founder.   

55.  The Defendants represented that on product Launch, ONPASSIVE 

would engage in an intensive marketing program to attract new customers and, 

using an automated system, direct traffic to websites that they would create for 

each Reseller (a Founder or investor who joins post-Launch).  Individuals directed 

to a Reseller’s website who then purchased a product, would be deemed a recruit 

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of the Reseller.  ONPASSIVE tracked Founders recruited by other Founders and 

undertook to track recruits post-Launch.  Accordingly, Defendants made 

recruitment of more Founders and/or Resellers a focal point of their pyramid 

scheme from inception.  

56. Defendants also urged and incentivized investors to join as early as 

possible by emphasizing that the earlier interested parties joined, the more highly 

placed they would be in the pyramid relative to later joining participants, and the 

more they could earn in passive income from those placed under them.   

57. Although Defendants emphasized that participants could maximize 

their passive income by recruiting others, Defendants also told investors—whether 

Founders or those considering joining later—that they could earn passive income 

without engaging in any recruiting activity, but instead relying entirely on 

ONPASSIVE to conduct marketing efforts and, post-Launch, to place recruits 

ONPASSIVE solicited directly under existing participants in the pyramid structure.      

58. While Defendants initially represented that they would release the 

suite of applications for business owners looking to create an online presence to 

market their services or products, they also repeatedly represented that investors 

did not need to have an already existing business.  Rather, investors could use the 

purported product post-Launch to market the ONPASSIVE program (and, 

implicitly, the passive income making opportunity), thereby populating the 

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pyramid under them with new recruits to maximize their own passive income 

stream.  Thus, no business use for the product was needed beyond recruiting for 

ONPASSIVE, and the investors’ profits would come from the recruitment of 

others into the scheme rather than from product sales to bona fide retail purchasers.    

59. The most heavily marketed aspect of the fraudulent scheme to attract 

investors was not the potential or value of the purported software application 

product, but rather the potential size of the income opportunity, about which 

Defendants have made multiple and repeated materially misleading claims.   

60. For example, Defendants falsely advertised in promotional materials 

and live and recorded webinars posted to the Back Office outlandish potential 

passive or “residual” returns to investors that could last “for life.”  The payment 

grid below, which appeared in ONPASSIVE e-Books and webinars posted to 

ONPASSIVE’s Back Office at least up through late 2020, purports to show how a 

participant could receive up to $2,032,614 per month for life.  This number is 

based on the unrealistic assumption that ten levels of recruits, comprising 88,573 

commission-generating positions of persons buying in at varying levels, would 

populate the pyramid under the participant.   

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61. Illustrative of how Defendants used this payment grid is a webinar the 

Defendants broadcast on September 25, 2018, and then posted to the Company’s 

Back Office website.  In the webinar, Mufareh stated that the grid showed how it 

was possible for participants to receive over $2 million per month if up to ten tiers 

under them were fully populated and suggested that $30 million per month was 

feasible if more than ten rows were populated. 

62. An e-Book reviewed and edited by Mufareh and posted to 

ONPASSIVE’s Back Office with Mufareh’s authorization from December 2021 to 

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August 2022 claimed that a participant could have “an infinite team” of 

downstream recruits from which the participant would draw commissions and earn 

“unlimited residual income” “for life.”  Elsewhere the same e-Book stated that a 

participant could earn thousands and even millions of dollars.   

63. Additionally, in February 2020, Mufareh reviewed and approved for 

posting in the Back Office a false marketing message from a Founder with 

“realistic,” “conservative,” and “worst case” scenarios that projected Founders 

would earn over $32 million with the system, and which touted the purported 

income benefits of buying multiple positions. 

64. Throughout the Relevant Period, Mufareh knew or was reckless in not 

knowing that the representations set forth in Paragraphs 59 through 63 concerning 

the purported income that could be earned from investing in the ONPASSIVE 

pyramid scheme were factually unsupportable and materially misleading.  As 

CEO, co-owner, and the ultimate authority over all ONPASSIVE operations and 

statements, Mufareh’s scienter is imputable to ONPASSIVE.   

65. A reasonable investor would have wanted to know that ONPASSIVE 

was a pyramid scheme. 

66. A reasonable investor would have wanted to know that ONPASSIVE 

was unsustainable and could never deliver on the “passive” or “residual” income 

Mufareh and ONPASSIVE promoted to investors.  

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67. Throughout the Relevant Period, Mufareh has known or been reckless 

in not knowing that ONPASSIVE is a pyramid scheme that has operated and 

continues to operate as a fraud or deceit on investors.  Mufareh’s scienter is 

imputable to ONPASSIVE.   

II. DEFENDANTS MADE MATERIAL MISREPRESENTATIONS IN  
FURTHERANCE OF THE PYRAMID SCHEME 
 
68. In addition to those material misrepresentations addressed in 

Paragraphs 59 through 63 above, and in furtherance of their pyramid scheme, 

Defendants made other materially false and misleading statements or omitted 

information which made those statements which were made materially misleading.  

A. Defendants Fraudulently Misrepresented that ONPASSIVE was 
“Legal” and “Fully Compliant”  

  
69. During the Relevant Period, Defendants misrepresented to investors 

that ONPASSIVE was engaged in a legal business when they knew or were 

reckless in not knowing that they were operating an unlawful pyramid scheme. 

70. Defendants’ misrepresentations were not made in the form of 

opinions; rather, they were made as statements of fact, for example: 

a. Defendants’ misstatements that ONPASSIVE was engaged in a 

legal business were made in webinars dated September 25, 2018, July 18, 2019, 

and June 11, 2020, which were posted to the Back Office.   

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b. In a webinar dated August 29, 2019, Mufareh falsely declared 

that ONPASSIVE was “legal” in every country in which it operated, or there 

would be “workarounds” to make it legal.   

c. E-books, which Mufareh reviewed, edited, and authorized for 

posting to ONPASSIVE’s Back Office in April 2019 and again in December 2021, 

stated “WE ARE FULLY LEGAL-WORLDWIDE”; “WE ARE FULLY 

COMPLIANT-WORLDWIDE”; and “WE WILL NOT be shut down by a 

government; THEY WILL USE OUR PRODUCTS!”  

71. The foregoing misrepresentations were material because a reasonable 

investor would want to know if an investment opportunity was illegal in deciding 

whether to invest.  

72. Mufareh’s entire course of dealings, as alleged in this Amended 

Complaint, reflect his awareness that ONPASSIVE is an illegal pyramid scheme.  

His scienter is imputable to ONPASSIVE.   

B. Defendants Fraudulently Misrepresented the Feasibility and 
Timing of Product Launch  

 
73. Mufareh, beginning in July 2018, and ONPASSIVE, following its 

formation in November 2018, made material misstatements up through at least 

October 2020 regarding the feasibility and timing of the product Launch, while 

knowing or being reckless in not knowing that they lacked a factual basis for 

making the statements.   

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a. Beginning on July 17, 2018 and continuing through at least 

October 2018, Mufareh composed and sent, or directed others to send, hundreds of 

emails to potential investors containing the text “I [Mufareh] will send an update 

when the program launches in about one month.” 

b. On September 25, 2018, Mufareh said in a live webinar, a 

recording of which was posted to ONPASSIVE’s Back Office, “We’re closer to 

launch, we’re in the second half, maybe the last third, and you do the math … I 

don’t have a date, I’m going to touch up on that respectfully, is it realistic to launch 

in the next 30 days?  Very much possible I would say okay.” 

c. On October 3, 2018, Mufareh said in a live webinar, a recording 

of which was posted to ONPASSIVE’s Back Office, “We are definitely closer to 

the launch than when we announced this concept let’s say in the past, so we’re 

clearly in the probably last third or quarter maybe.”   

d. In a webinar dated April 25, 2019, a recording of which was 

posted to ONPASSIVE’s Back Office, Mufareh represented that ONPASSIVE 

would be launched or nearly ready to launch by the end of June 2019 (then two 

months away), saying, “In June we will have a kick start party in Orlando.  Last 

weekend of June.  Celebrate launch or opening whether it’s already open or getting 

tested just ready to launch.” 

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e. In a webinar dated March 26, 2020 and posted to 

ONPASSIVE’s Back Office, Mufareh stated that “ONPASSIVE is going to launch 

… it is everything looking good for 2020.” 

f. On August 6, 2020, Mufareh stated in a webinar, a recording of 

which was posted on ONPASSIVE’s Back Office, that, “ONPASSIVE is 

scheduled and set to launch in 2020... 2020....  If we need more time we will let 

you know right now.  We don’t feel there’s any uh necessary time to launch....  We 

have plenty of time for the remaining portion of unfinished part of ONPASSIVE to 

complete it in 2020.” 

g. Mufareh thereafter reviewed six emails drafted by members of 

ONPASSIVE’s Leadership Council which reiterated Mufareh’s August 6, 2020, 

pronouncement that there would be a 2020 launch date, and which were 

transmitted via ONPASSIVE’s official email address to prospective and existing 

investors on various dates from August 31 through October 31, 2020. 

h. In a webinar dated October 15, 2020 and posted to 

ONPASSIVE’s Back Office, Mufareh stated that all that was left was “realistically 

a few weeks” of testing, saying, “If now we are considered in pre-launch – how 

much more launch you want – like okay just that ribbon cutting?  It will happen.  

It’s a done deal in my mind, that’s why I operate as we already have a multi-billion 

dollar business in every country on the planet.” 

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74. Each of the foregoing statements was false when made because, first, 

Defendants did not have the personnel to develop the applications along the time 

lines indicated above; and, second, to the extent Defendants hired personnel and 

expended resources, at least up through August 2020, it was chiefly to develop 

ONPASSIVE’s Back Office website used for recruiting new investors, tracking 

placement in the pyramid structure, and marketing the ONPASSIVE income 

opportunity.  

75. For example, in July 2018, when Mufareh started making, directly or 

indirectly, the first of the statements referenced above that the “program [would] 

launch[] in about one month,” Mufareh and Asmahan Mufareh were the only two 

persons involved with any aspect of ONPASSIVE’s operations, and neither had 

any expertise to develop a suite of computer applications using AI.     

76. While Defendants retained an information technology (“IT”) 

outsourcing firm in September 2018 and subsequently brought IT personnel in-

house, at Defendants’ direction the IT firm and in-house personnel focused their 

efforts, at least during the first two years, on developing ONPASSIVE’s Back 

Office for purposes of recruiting investors rather than the software applications 

ONPASSIVE was purportedly “launching.”  As mentioned, as of August 2020, the 

same month that Defendants announced that the product suite would include 30 

software applications that would work together in an “ecosystem,” Defendants had 

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completed only two comparatively simple software applications (an internet 

protocol address (“IP”) tracker and a uniform resource locator (“URL”) shortener), 

equivalents of which were already readily available to the public online for free.  

Defendants had not launched the two software applications, by which Defendants 

had stated they meant the commercial launch of the ecosystem comprised of all 

applications simultaneously.  Moreover, development of most of the 30 

applications that were to comprise the ecosystem had not even commenced by 

August 2020. 

77. Defendants’ statements about ONPASSIVE’s purported product 

Launch were designed to lull investors into believing that a real product Launch 

would occur when in fact no such Launch occurred, and no commissions were paid 

to Founders as promised. 

78. In November 2022, Defendants made available to the general public 

four applications, including the IP tracker and URL shortener, all free of charge.  

Defendants have since offered two additional applications available to the general 

public free of charge.  As of June 30, 2023, the remaining 44 applications had yet 

to be released and the product “launch,” defined as the commercial offering of 

product, which is supposed to prompt the payment of monthly subscription fees 

generating commissions, had yet to occur. 

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79. Defendants’ misrepresentations were material to investors’ decisions 

whether to invest because only after the product Launch could investors expect 

their first returns in the form of commissions.  The misrepresentations that a 

product Launch would likely occur within specified short timeframes would also 

have spurred Founders who held free positions to pay their $97 fees before the 

window closed.    

80. At the time he made each of the statements set forth in paragraph 73 

above, Mufareh knew or was reckless in not knowing that the statements were 

materially false and misleading.  Specifically, he knew or was reckless in not 

knowing at the time of each statement that development of applications had not yet 

started, let alone progressed to the point that product Launch could occur within 

the timeframes specified, and that ONPASSIVE lacked the capacity to develop the 

applications in the timeframes specified.  Mufareh’s scienter is imputable to 

ONPASSIVE.   

C. Defendants Created Counterfeit and Misleading Websites on 
Which to Post Fake Independent Third-Party Positive Reviews in 
Furtherance of Their Pyramid Scheme  

 
81. In early 2019, pre-existing and independently-operated third-party 

MLM review blog websites, “Review Site 1” and “Review Site 2,” posted multiple 

negative reviews of the Defendants.  

82. Illustrative of the negative reviews were the following:  

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a. On January 7, 2019, Review Site 1 posted that, “there’s 

inherently nothing of particular interest with ONPASSIVE.  It’s literally nothing 

more than a pyramid scheme launched by a serial scammer.” 

b. On or before February 28, 2019, Review Site 2 posted that, 

“ONPASSIVE is a scam, and here is our main reason why: No retail products 

offered.  Sure the company offers a[ ] [marketing] platform that you can gain 

access to, but only as an [MLM] affiliate member.” 

83. The Defendants initially responded to the negative reviews by telling 

participants to “ignore the haters.”   

84. When the negative reviews persisted, however, Mufareh approved in 

November 2019 the creation of counterfeit and intentionally misleading websites 

mimicking the names and appearances of the above-mentioned existing websites 

and the writing and posting on the counterfeit websites of positive reviews of 

ONPASSIVE and Mufareh.   

a. ONPASSIVE personnel specifically proposed to Mufareh―and 

he agreed to the proposal―that they would “us[e] these two [counterfeit] sites as 

3rd party site,” “write … exclusive review[s] on our own brand (just like a 3rd 

persons writing),” and use both counterfeit websites “to influence the people,” with 

the “first target assigned [being] to knock down those [review sites] from the 

search results.”  

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b. The names of the two counterfeit sites purposely tracked the 

names of  existing MLM review websites in their web URL addresses with slightly 

altered domain names: the domain extension “.us” of the counterfeit Review Site 1 

site differed from the domain extension “.com” of the existing Review Site 1, and 

the domain name of the counterfeit Review Site 2 differed from that of the existing 

Review Site 2 only in the substitution of the singular for the plural of Review Site 

2’s name.  Logos appearing at the top of each page of the counterfeit websites 

included the text of Review Site 1’s and Review Site 2’s names. 

c. In November 2019, Mufareh personally registered the two 

counterfeit websites, paying to have the sites registered under the name of a 

“domain proxy” to conceal his and ONPASSIVE’s involvement with the websites.  

By concealing their involvement, Mufareh and ONPASSIVE sought to deceive 

investors into thinking that the reviews posted on the counterfeit sites were 

objectively made by independent third parties.  

d. As directed by Mufareh, to whom they reported regularly on 

their progress, ONPASSIVE personnel set about operating the websites starting in 

late 2019 in a manner to mislead visitors as to the sites’ objectivity.  For example, 

in the counterfeit Review Site 1 “About” section, ONPASSIVE personnel wrote: 

Our only objective is to educate users who are searching for companies [including] 
MLM (primary target industry) … [We] summarize a company’s overall status 
and reputation in the market.  These reviews could help any user to identify and 

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decide whether to approach a company or not to for any business or professional 
reasons. 
 

e. Further, ONPASSIVE personnel not only posted reviews of 

Mufareh and ONPASSIVE, which were uniformly favorable, but also posted 

reviews of other programs and advice on MLMs generally, which tracked third-

party MLM review sites, so as to further the deception.   

f. As authorized by Mufareh, ONPASSIVE personnel wrote and 

posted seven positive reviews of Mufareh and ONPASSIVE on the counterfeit 

Review Site 2 website between November 2019 and March 2020, seven of which 

remained online until at least November 2021, and six of which remained online 

until at least October 2022.  One such review, posted on November 30, 2019, 

stated, “Do we recommend you to Join ONPASSIVE?  The answer is – YES, we 

do recommend you to be part of ONPASSIVE. … And it’s a scam-free, fully legit 

and compliant and has a global presence in more than 100+ countries.”  

g. As authorized by Mufareh, ONPASSIVE personnel wrote and 

posted six positive reviews of Mufareh and ONPASSIVE on the counterfeit 

Review Site 2 between December 2019 and March 2020, which remained posted 

online until at least October 2022.  One such review, posted on February 16, 2020, 

stated, “Why do I believe that ONPASSIVE is responsible for taking my business 

goals to heights, which I never thought I could?  … With all of these advantages in 

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front of my eyes, I couldn’t stay blind and not plunge into becoming a member of 

ONPASSIVE.” 

85. The creation of the counterfeit websites and posting of fake positive 

reviews of Mufareh and ONPASSIVE acted as a deceit on investors by falsely 

purporting to be objective third-party sites and data.  In addition, in omitting to 

disclose that the sites and reviews were controlled by ONPASSIVE and its 

personnel, the statements made were materially misleading.    

86. Mufareh authorized and participated in the creation of the counterfeit 

websites and authorized the posting of the internally-generated positive reviews of 

himself and ONPASSIVE.   

87. Mufareh understood the impact on investors of positive reviews 

posted to MLM websites, observing in a June 11, 2020, webinar posted to the Back 

Office, for example, that someone who spots a positive review online was more 

likely to register for ONPASSIVE and pay the $97 fee to become a Founder.  

88. A reasonable investor would have wanted to know that the websites 

were counterfeit, that they were owned and controlled by Mufareh and 

ONPASSIVE, and that the positive reviews were not independent but instead 

written by ONPASSIVE personnel and approved by Mufareh.  

89. Mufareh knew or was reckless in not knowing that the creation of the 

counterfeit websites and posting of fake positive reviews of Mufareh and 

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ONPASSIVE was a device, scheme or artifice to defraud and operated or would 

operate as a fraud or deceit on investors because purporting to be objective third-

party sites and reviews, and that, in omitting to disclose that the sites were created 

and operated by ONPASSIVE and that the postings were internally generated by 

ONPASSIVE personnel, those statements that were made were materially 

misleading as a result because falsely conveying that they were the product of 

objective third-parties.   

90. Further, Mufareh knew or was reckless in not knowing that the 

operation of the pyramid scheme, the creation of the counterfeit websites, and the 

material misrepresentations and omissions collectively constituted a scheme to 

defraud and operated or would operate as a fraud or deceit on investors.  Mufareh’s 

scienter is imputable to ONPASSIVE. 

III. DEFENDANTS ENGAGED IN THE UNREGISTERED OFFER AND 
SALE OF SECURITIES  
 
91. Federal securities laws require that those offering or selling securities 

disclose certain information by filing a registration statement with the SEC.  This 

information allows investors to make informed judgments about whether to 

purchase the securities.   

92. Mufareh and ONPASSIVE offered and sold opportunities to invest in 

a pyramid scheme to the general public, including investors throughout the United 

States, and raised at least $108 million in investor proceeds.  

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93. Mufareh and ONPASSIVE pooled these investor funds to operate the 

business to include developing and marketing the purported ecosystem of software 

applications and make the pyramid opportunity profitable.  Accordingly, investors’ 

expectations of profit were, and still are, dependent on Mufareh’s and 

ONPASSIVE’s ability and supposed efforts to develop the purported product and 

make the pyramid opportunity a profitable endeavor. 

94. The offer and sale of the opportunity to participate in ONPASSIVE, 

which is a pyramid scheme, constituted an investment contract and, therefore, a 

security. 

95. The offer and sale of the opportunity to participate in the 

ONPASSIVE pyramid scheme was not registered with the SEC.  No exemption 

from registration applied.   

IV. DEFENDANTS AND RELIEF DEFENDANT ASMAHAN MUFAREH 
RECEIVED INVESTORS’ FUNDS 
 
96. As a result of the foregoing, Defendants had raised in excess of $108 

million in illicit proceeds from investors as of March 2023.   

97. Ill-gotten gains were received by Defendants from investors through a 

variety of different methods, including in crypto assets, cash, check, wire transfers, 

and various third-party payment services.  All of these payments went into 

accounts which were and/or are subject to Mufareh’s and/or Asmahan Mufareh’s 

control.     

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98.  Mufareh and/or Asmahan Mufareh have converted a sizeable quantity 

of investors payments into crypto assets, while holding other proceeds in accounts 

with financial institutions.  From these proceeds, Mufareh and Asmahan Mufareh 

have expended substantial sums on personal expenses, including fine dining, 

luxury resort stays, car rentals, day spas, hair salons, martial arts lessons, and 

jewelry purchases.   

99. Asmahan Mufareh has received ill-gotten funds, and does not have a 

legitimate claim to those funds.  

FIRST CLAIM FOR RELIEF 
Unregistered Offers and Sales of Securities  

in Violation of Securities Act Sections 5(a) and 5(c)  
(Against Defendants Ashraf Mufareh and ONPASSIVE)  

 
100. Paragraphs 1, 10, 21-22,  and 91-95 are realleged and incorporated by 

reference as though fully set forth herein. 

101. Investors in Defendants’ pyramid-structured sales program―as 

described in paragraphs 1-17, 24-29 and 32-63―made investments of money in a 

common enterprise about which they were led to expect profits from the efforts of 

Defendants or third parties. 

102. Investors’ subscriptions in the Defendants’ pyramid-structured sales 

program constituted investment contracts, which are securities. 

103. By engaging in the conduct described above, Defendants, singly and 

in concert with others, made use of the means or instruments of transportation or 

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communication in interstate commerce, or of the mails, to offer to sell or to sell 

securities, or carried or caused to be carried through the mails or in interstate 

commerce, by means or instruments of transportation, securities for the purpose of 

sale or for delivery after sale, when no registration statement had been filed or was 

in effect as to such securities, and when no exemption from registration was 

applicable. 

104. By engaging in the conduct described above, Defendants directly or 

indirectly violated, and unless enjoined are reasonably likely to continue to violate, 

Securities Act Sections 5(a) and 5(c) [15 U.S.C. §§ 77e(a) and 77e(c)]. 

SECOND CLAIM FOR RELIEF 
Fraud in Violation of Securities Act Sections 17(a)(1)-(a)(3)  

(Against Defendants Ashraf Mufareh and ONPASSIVE)  
 

105. Paragraphs 1-17, 21-22, 24-29 and 33-99  are realleged and 

incorporated by reference as though fully set forth herein. 

106. By engaging in the conduct described above, Defendants, in the offer 

or sale of any securities by the use of the means or instruments of transportation or 

communication in interstate commerce or by use of the mails, directly or 

indirectly: 

a. knowingly or recklessly employed a device, scheme, or artifice 

to defraud as alleged in paragraphs 1-17, 24-29 and 33-99; 

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b. negligently obtained money or property by means of an untrue 

statement of a material fact or an omission to state a material fact necessary in 

order to make the statements made, in light of the circumstances under which they 

were made, not misleading as alleged in paragraphs 1, 11, 12, 37, 41, 46, 51, 52, 

54, 57, 60, 63-80 and 84-90; and 

c. negligently engaged in a transaction, practice, or course of 

business which operated or would operate as a fraud or deceit upon the purchaser  

as alleged in paragraphs 1-17, 24-29 and 33-99. 

107. By reason of the foregoing, Defendants violated, and, unless enjoined, 

are reasonably likely to continue to violate, Sections 17(a)(1) - (a)(3) of the 

Securities Act [15 U.S.C. § 77q(a)(1) - (a)(3)]. 

THIRD CLAIM FOR RELIEF 
Fraud in Connection with the Purchase or Sale of Securities 

in Violation of Exchange Act Section 10(b) and Rules 10b-5(a) - (c) 
Thereunder  

(Against Defendants Ashraf Mufareh and ONPASSIVE) 
 

108. Paragraphs 1-17, 21-22, 24-29 and 33-99 are realleged and 

incorporated by reference as though fully set forth herein.  

109. By engaging in the conduct described above, Defendants directly or 

indirectly, by use of the means or instrumentalities of interstate commerce, or of 

the mails knowingly or recklessly:  

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a. employed a device, scheme, or artifice to defraud as alleged in 

paragraphs 1-17, 24-29 and 33-99; 

b. made an untrue statement of a material fact or omitted to state a 

material fact necessary in order to make the statements made, in the light of the 

circumstances under which they were made, not misleading as alleged in 

paragraphs 1, 11, 12, 37, 41, 46, 51, 52, 54, 57, 60, 63-80 and 84-90; and  

c. engaged in an act, practice, or course of business which 

operates or would operate as a fraud or deceit upon any person as alleged in 

paragraphs 1-17, 24-29 and 33-99. 

110. By engaging in the foregoing misconduct, Defendants violated, and 

unless enjoined are reasonably likely to continue to violate, Exchange Act Section 

10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5(a) - (c) [17C.F.R. § 240.10b-5(a) - (c)] 

thereunder. 

FOURTH CLAIM FOR RELIEF 
Violation, as a Control Person, of Exchange Act Section 10(b) and Rule 

10b-5(a) - (c) 
( Against Defendant Ashraf Mufareh) 

 
111. Paragraphs 1-17, 19, 21-22, 24-29 and 33-99 are realleged and 

incorporated by reference as though fully set forth herein. As alleged in paragraphs 

1-17, 24-29 and 33-99, ONPASSIVE violated Exchange Act Section 10(b) and 

Rule 10b-5(a) - (c). 

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112. At all relevant times, Mufareh controlled ONPASSIVE and was a 

culpable participant in its violations of Exchange Act Section 10(b) and Rule 10b-

5(a) - (c). 

113. By reason of the foregoing, Mufareh is liable as a controlling person, 

pursuant to Exchange Act Section 20(a) [15 U.S.C. § 78t(a)], for ONPASSIVE’S 

violations of Exchange Act Section 10(b) and Rules 10b-5(a) - (c) thereunder. 

FIFTH CLAIM FOR RELIEF 
Unjust Enrichment 

(Against  Relief Defendant Asmahan Mufareh) 
 

114. Paragraphs 1-17, 21-23, 24-29 and 33-99 are realleged and 

incorporated by reference as though fully set forth herein.  

115. Exchange Act Section 21(d)(5) [15 U.S.C. § 78u(d)(5)] states: “In 

any action or proceeding brought or instituted by the SEC under any provision 

of the securities laws, the SEC may seek, and any Federal court may grant, any 

equitable relief that may be appropriate or necessary for the benefit of 

investors.” 

116. As alleged in paragraphs 1-17, 23-29 and 33-99, Relief Defendant 

Asmahan Mufareh received investor funds and assets that were the proceeds, or 

are traceable to the proceeds, of Defendants’ unlawful activities, and Relief 

Defendant Asmahan Mufareh has no legitimate claims to those proceeds and 

gave no consideration for exchange of those funds. 

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117. Relief Defendant Asmahan Mufareh obtained the funds and assets 

as part of and in furtherance of the securities violations alleged in paragraphs  

1-17, 21-22, 24-29 and 33-99, and under circumstances in which it is not just, 

equitable, or conscionable for them to retain the funds and assets.  As a 

consequence, Relief Defendant Asmahan Mufareh was unjustly enriched.   

RELIEF REQUESTED 

WHEREFORE, the SEC respectfully requests the Court find that Defendants 

committed the violations charged and that, as a result of these violations, 

Defendants and Relief Defendant Asmahan Mufareh received ill-gotten gains; and 

enter Final Judgments: 

I. 

Permanent Injunction 
 

Permanently restraining and enjoining Defendants Mufareh and 

ONPASSIVE, their officers, agents, servants, employees, attorneys, and all persons 

in active concert or participation with them, and each of them, from directly or 

indirectly violating the federal securities laws alleged in this Amended Complaint; 

and further permanently restraining and enjoining Defendants, their officers, 

agents, servants, employees, attorneys, and all persons in active concert or 

participation with them, and each of them, from directly or indirectly offering, 

operating, or participating in any marketing or sales program in which a participant 

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is compensated or promised compensation solely or primarily for inducing another 

person to become a participant in the program, or if such induced person induces 

another to become a participant in the program. 

II. 
 

Disgorgement with Prejudgment Interest 

Ordering Defendants and Relief Defendant Asmahan Mufareh to disgorge 

all ill-gotten gains, with prejudgment interest, as a result of the acts or courses of 

conduct alleged in this Amended Complaint, with disgorgement from the 

Defendants to be on a joint and several basis, pursuant to Exchange Act Section 

21(d)(3), (5), and (7) [15 U.S.C. § 78u(d)(3), (5), and (7)]. 

III. 
 

Civil Money Penalties 
 

Ordering Defendants Mufareh and ONPASSIVE to pay civil money 

penalties pursuant to Securities Act Section 20(d) [15 U.S.C. § 77t(d)] and 

Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)]. 

IV. 
 

Officer and Director Bar 
 

Prohibiting Defendant Mufareh from acting as an officer or director of any 

issuer that has a class of securities registered pursuant to Section 12 of the 

Exchange Act [15 U.S.C. § 78l] or that is required to file reports pursuant to 

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Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)], pursuant to Section 

21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)] and Section 20(e) of the 

Securities Act [15 U.S.C. § 77t(e)]. 

V. 
 

Further Relief 
 

Granting such other and further relief as the Court determines to be 

necessary and appropriate. 

VI. 
 

Retention of Jurisdiction 
 

Further, the SEC respectfully requests the Court retain jurisdiction over this 

action and over Defendants in order to implement and carry out the terms of all 

orders and decrees that may hereby be entered, or to entertain any suitable 

application or motion by the SEC for additional relief within the jurisdiction of this 

Court. 

  

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DEMAND FOR A JURY TRIAL  

Pursuant to Rules 38(b) and 39(a) of the Federal Rules of Civil Procedure, 

the SEC demands trial by jury on all issues so triable.     

     Respectfully submitted, 

 
November 6, 2023    By: /s/ Michael J. Friedman 

Michael J. Friedman 
New York Bar # 4297461 
Assistant Chief Trial Counsel 
(202) 551-7977 
[email protected] 
Gregory N. Miller 
Assistant Chief Trial Counsel 
Florida Bar # 0976652 
(202) 551-4469 
[email protected] 
100 F Street, N.E. 
Washington, D.C.  20549 

 
Attorneys for Plaintiff 
Securities and Exchange Commission  

 

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mailto:[email protected]
mailto:[email protected]