SEC v. Ashraf Mufareh; ONPASSIVE LLC; and Asmahan Mufareh, No. 6:23-cv-01539, Middle District of Florida (Aug. 11, 2023) — Complaint

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION

SECURITIES AND EXCHANGE
COMMISSION,

  Plaintiff,

 vs.

Case No.
ASHRAF MUFAREH AND
ONPASSIVE LLC a/k/a Gofounders and
Ofounders,

  Defendants, and

ASMAHAN MUFAREH

  Relief Defendant.

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

Plaintiff Securities and Exchange Commission (“SEC” or “Commission”)
for its 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 defendant Mufareh’s fraudulent
and unregistered offering of securities targeting investors in the United States and

2

around the world through his multi-level marketing (“MLM”) company,
ONPASSIVE LLC.
2.  Beginning in July 2018 to the present (the “Relevant Period”),
Mufareh in his individual capacity and later through ONPASSIVE, 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 a position in an
MLM pyramid structure created by Mufareh for $97, locking in their positions
before any launch of the purported product and before others began buying into the
scheme in the future.  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.
4. In addition to this early bird Founders promotion, potential investors
were pitched on the notion that once the product was actually launched for

3

commercial sale they and others would eventually be able 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 this payment
would automatically be placed in a pyramid structure and eligible to receive as a
“commission” a portion of monthly subscription fees paid by those placed after
them in the pyramid structure.
5. 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.
6. Defendants represented that they would engage in a marketing
campaign ―once they launched ONPASSIVE’s purported suite of computer
applications―to recruit other participants and direct the traffic to websites
ONPASSIVE created for each Founder and participant joining post-launch using
an automated process.
7. Mufareh and ONPASSIVE also incentivized persons to recruit as
many other participants as possible through an MLM structure,  claiming a
participant’s recruits would be placed under the participant and be sources of
commissions paid to the participant.

4

8. 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.
9. The offer and sale of the opportunity to participate in ONPASSIVE,
which is a 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 opportunity has never been
registered with the SEC and no exemption from registration applies.
10.   To further their fraudulent pyramid scheme,  Mufareh and
ONPASSIVE knowingly made repeated material 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.
11. Further, to counter negative reviews of Mufareh and ONPASSIVE on
existing MLM review websites, Mufareh and ONPASSIVE furtively created
websites mimicking the names of the existing sites and on which ONPASSIVE
personnel, at Mufareh’s direction, then posted internally-generated positive

5

reviews of Mufareh and ONPASSIVE, falsely passing them off as objective, third-
party reviews.
12. Effective June 22, 2022, ONPASSIVE ceased accepting any more
Founder registrations.
13. As of March 2023, ONPASSIVE had reaped over $108 million from
the purchase of over 1.12 million Founders positions by over 800,000 investors
located in the United States and abroad, and who paid $97 for each position in the
pyramid scheme in advance of the supposed product launch.
14. 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.
15. As of June 30, 2023, ONPASSIVE had not yet launched any product
for a fee or paid any commissions to investors.
16. Rather than commit investor proceeds principally to develop and
commercialize the purported software applications, Mufareh has used funds to
further the pyramid scheme and for his and his spouse’s personal use.  Specifically,
Mufareh transferred investors’ funds to his wife, 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

6

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.
VIOLATIONS
17. By their conduct as alleged in this 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.
18. Moreover, by his conduct as alleged in this 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 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. §

7

240.l0b-5] thereunder, pursuant to Exchange Act Section 20(a) [15 U.S.C. §
78t(a)].
19. 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 Complaint or in acts, practices, transactions, and courses
of business of similar types and objects.
DEFENDANTS
20. Ashraf “Ash” Mufareh, age 48, 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.
21. 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,
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

8

MLM program.  All acts and omissions of ONPASSIVE as alleged herein were
done at Mufareh’s direction.

RELIEF DEFENDANT

22. Asmahan Mufareh, age 38, 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
23. “Founders”    These are investors who registered on ONPASSIVE's
Back Office prior to product sales occurring (or “pre-launch”) for the opportunity
to be placed in a pyramid structure and ultimately eligible to receive as a
“commission” a portion of monthly subscription fees paid by those placed after
them in the pyramid structure.  ONPASSIVE placed each Founder in the pyramid
pre-launch in the order in which they registered.  The Defendants, however,  did
distinguish between Founders that paid the $97 pre-launch versus those that have
not yet paid. The Defendants referred to Founders who have not yet paid as
holding “free” positions.  The Defendants can   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.”

9

24. “Reseller”   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
ONPASSIVE, once having made the election to be a “Reseller,” the 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 artificial
intelligence.  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 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.
25. “Leadership Council”     This refers to a group of highly productive
and enthusiastic Founders selected by Mufareh to promote ONPASSIVE.

10

26. “Back Office”  This refers to ONPASSIVE’s non-public website
accessible by the over 800,000 investors who registered as “Founders,” or were
granted access by Mufareh.
27. “e-Book”     This refers 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, containing information
concerning  ONPASSIVE’s MLM program.
JURISDICTION AND VENUE
28. 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)].
29. 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 $97 to Defendants to be
Founders.  Furthermore, Defendant Mufareh and Relief Defendant Asmahan

11

Mufareh reside in this District, and ONPASSIVE’s principal place of business is in
this District.
30. 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 Complaint, Defendants, directly and 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. The ONPASSIVE Multi-Level Marketing Program
31. In July 2018, Mufareh, and ONPASSIVE, following its formation in
November 2018, began soliciting investors to ONPASSIVE which they pitched as
a legitimate MLM program, the shared profits of which would purportedly come
from monthly subscription fees to use online software applications, which
ONPASSIVE has   yet to fully develop and make available commercially.

12

32. 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.  ONPASSIVE’s Back Office
contained informational e-Books which Mufareh reviewed, edited,  and authorized
to have posted.  Anyone registering as a Founder or granted access by Mufareh
could access ONPASSIVE’s Back Office.  Founders who actively promoted
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.
33. ONPASSIVE’s promotional materials 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.  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 20 to over 50.

13

34. 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.
35. Investors could purchase placement in the MLM pyramid in one of
two ways: first, by paying $97 in advance of the product launch; and, second, by
waiting to purchase a software product on or after product launch.  Under either
option, each investor would be placed in the pyramid in the order in which each
registered.  “Founders” as a category of early investors were assured of being
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.
36. A    visual depiction of the MLM opportunity, 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:

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 MLM post-launch but not 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.

14

37. 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 indicated 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.
38. Ac
cording to Defendants’ promotional materials and communications
with Founders, to maintain one’s position in the MLM pyramid at the time of
product launch, a Founder has   to have paid the $97 Founder’s fee,  purchased   a

15

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 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.
39. From inception, Defendants claimed that ONPASSIVE would begin
paying commissions upon product launch, when it began collecting monthly
subscription fees.
40. 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 pyramid.
41. By December 2021, Defendants had modified the MLM program
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

16

product launch.  Founders would now have to pay a monthly subscription fee on
product launch.  Finally, in addition to purchasing a product and commencing
payment of monthly subscription fees at product launch, in order to receive
commissions, an investor―whether a Founder or 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.
42. 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 the investor to purchase product, the only reason
for purchasing more than one Founder’s position was to secure multiple passive
income streams.
43. Although ONPASSIVE claimed that it ceased accepting Founder
registrations effective June 22, 2022, Defendants have afforded those Founders
holding “free” positions as of that date to pay the $97 Founder’s fee after that date,

17

resulting in the payment of tens of millions of dollars in Founders’ fees in the
ensuing period.
B. Defendants Promoted the Plan, Emphasizing the Passive Income
Opportunity through Recruitment

44. Throughout the Relevant Period, Defendants made clear how much an
investor would receive in commissions was directly tied to how high in the
pyramid the 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
MLM pyramid.  Only a Founder could recruit other Founders, who would then be
placed under and be sources of commissions for the recruiting Founder.
45.  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
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 MLM program
from inception.
46. Defendants also incentivized investors to join as early as possible by
emphasizing that the earlier interested parties joined, the more highly placed they

18

would be in the pyramid relative to later joining participants, and the more they
could earn in passive income from those placed under them.
47. 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’s efforts to market the MLM opportunity and, post-launch, place
recruits ONPASSIVE solicited directly under existing participants in the pyramid
structure.
48. While Defendants initially pitched the yet-to-be-released suite of
applications to be for business owners looking to create an online presence to
market their services or products, they also repeatedly told investors that they did
not need to have an already existing business.  Rather, investors could use the
product post-launch to market the ONPASSIVE program (and,  implicitly,  the
passive income making opportunity), thereby populating the 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.

19

49. The most heavily marketed aspect of the fraudulent scheme to
incentivize 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 misleading claims.
50. For example, Defendants 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.

20

51. 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.
52. An e-Book reviewed and edited by Mufareh and posted to
ONPASSIVE’s Back Office with Mufareh’s authorization from December 2021 to

21

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.
C. ONPASSIVE Is A Pyramid Scheme
53. ONPASSIVE is a pyramid scheme.  As described above,
ONPASSIVE offers investors in return for their payment of money the right to
promote and sell ONPASSIVE’s purported product and receive income not 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 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.
54. To earn commissions, an 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 who do not, so
as to maximize their passive income streams.  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.

22

55. 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, over 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.
56. Most ONPASSIVE investors are bound to lose money.  For example,
to fully populate ten more levels of the pyramid beyond the ten levels depicted in
paragraph 50 above 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 52
above.
57. A reasonable investor would have wanted to know that ONPASSIVE
was a pyramid scheme.

23

58. A reasonable investor would have wanted to know that ONPASSIVE
was unsustainable and could never deliver on the “passive” or “residual” income
Murfareh and ONPASSIVE promoted to investors.
59. 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.  As CEO, co-owner, and the
ultimate authority over all ONPASSIVE operations and statements, Mufareh’s
scienter is imputable to ONPASSIVE.
II. DEFENDANTS MADE MATERIAL MISREPRESENTATIONS IN
FURTHERANCE OF THE ILLEGAL ONPASSIVE SCHEME

60. In addition to operating a pyramid scheme, in furtherance of the
scheme, Defendants made 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”

61. During the Relevant Period, Defendants misrepresented to investors
that ONPASSIVE was engaged in a legal business:
a.   Mufareh stated this expressly in webinars dated September 25,
2018, July 18, 2019, and June 11, 2020, which were posted to the Back Office.  In
a webinar dated August 29, 2019, Mufareh falsely declared that ONPASSIVE was

24

“legal” in every country in which it operated, or there would be “workarounds” to
make it legal.
b. 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!”
62. The foregoing misrepresentations were material because a reasonable
investor would want to know if an investment opportunity was illegal in deciding
whether to invest.
63. Mufareh knew or was reckless in not knowing that the foregoing
statements were materially false and misleading.  His whole course of dealings, as
alleged in this 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

64. 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, including
the following:

25

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.”

26

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.”

27

65. 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 MLM pyramid structure, and marketing the ONPASSIVE income
opportunity.
66. 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.
67. 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

28

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.
68. 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.
69. 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 launch would
likely occur within specified short timeframes would also have spurred Founders
holding free positions to pay their $97 fees before the window closed.
70. At the time he made each of the statements set forth in paragraph 64
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

29

timeframes specified, and that ONPASSIVE lacked the capacity to develop the
applications in the timeframes   specified.
C. Defendants Created Counterfeit and Misleading Websites on
Which to Post Fake Independent Third-Party Positive Reviews

71. 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.
72. Illustrative of the negative reviews were the following:
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.”
73. The Defendants initially responded to the negative reviews by telling
participants to “ignore the haters.”  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.  ONPASSIVE

30

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.”
74. 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.
75. 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.

31

76. 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
decide whether to approach a company or not to for any business or professional
reasons.

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.
77. 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.”

32

78. 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 front of
my eyes, I couldn’t stay blind and not plunge into becoming a member of
ONPASSIVE.”
79. 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.
80. 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.
81. 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

33

likely to register for the ONPASSIVE MLM and pay the $97 fee to become a
Founder.
82. 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.
83. Mufareh knew or was reckless in not knowing that the creation of the
counterfeit websites and posting of fake positive reviews of Mufareh and
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.
84. 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.

34

III. DEFENDANTS AND RELIEF DEFENDANT ASMAHAN MUFAREH
RECEIVED INVESTORS’ FUNDS

85. As a result of the foregoing, as of March 2023, Defendants had raised
in excess of $108 million in illicit proceeds from investors.  Investors made
payments via 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.
86.  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.
87. Mufareh, ONPASSIVE, and Asmahan Mufareh have received ill-
gotten funds, and do not have a legitimate claim to those funds.
IV. DEFENDANTS

ENGAGED IN THE UNREGISTERED OFFER AND
SALE OF SECURITIES

88. Federal securities laws require that those offering or selling securities
disclose certain information by filing a registration statement with the SEC.  This

35

information allows investors to make informed judgments about whether to
purchase the securities.
89. 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.
90. 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 MLM 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 MLM opportunity a profitable endeavor.
91. The offer and sale of the opportunity to participate in ONPASSIVE,
which is  a pyramid scheme,  constituted an investment contract and, therefore, a
security.
92. 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.

36

FIRST CLAIM FOR RELIEF
Unregistered Offers and Sales of Securities
in Violation of Securities Act Sections 5(a) and 5(c)

(Against Both Defendants)

93. Paragraphs 1 through 92 are realleged and incorporated by reference
as though fully set forth herein.
94. Investors in Defendants’ pyramid-structured sales program made
investments of money in a common enterprise about which they were led to expect
profits from the efforts of Defendants or third parties.
95. Investors’ subscriptions in the Defendants’ pyramid-structured sales
program constituted investment contracts, which are securities.
96. By engaging in the conduct described above, Defendants, singly and
in concert with others, made use of the means or instruments of transportation or
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.

97. 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)].

37

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

98. Paragraphs 1 through 92 are realleged and incorporated by reference
as though fully set forth herein.
99. 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;
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; 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.
100. 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)].

38

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 Both Defendants)

101. Paragraphs 1 through 92 are realleged and incorporated by reference
as though fully set forth herein.
102. 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:
a. employed a device, scheme, or artifice to defraud;
b. made an untrue stat ement 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; and
c. engaged   in an act, practice, or course of business which
operates or would operate as a fraud or deceit upon any person.
103. 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.

39

FOURTH CLAIM FOR RELIEF
Violation, as a Control Person, of Exchange Act Section 10(b) and Rule
10b-5(a) - (c)
(Against Defendant Mufareh)

104. The Commission re-alleges and incorporates by reference here the
allegations in paragraphs 1 through 92 inclusive.
105. As alleged above, ONPASSIVE violated Exchange Act Section 10(b)
and Rule 10b-5(a) - (c).
106. 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).
107. 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 the Relief Defendant)

108. Paragraphs 1 through 92 are realleged and incorporated by reference
as though fully set forth herein.

109.
 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

40

equitable relief that may be appropriate or necessary for the benefit of
investors.”
110.
 As alleged in paragraphs 1 through 92 above, 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.
111. Relief Defendant Asmahan Mufareh obtained the funds and assets
as part of and in
furtherance of the securities violations alleged in paragraphs 1
through 92 above 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 w as 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:

41

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 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 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 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)].

42

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
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.

43

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.
DEMAND FO
R 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,

August 11,
 2023       By: /s/ Gregory N. Miller
Gregory N. Miller
Assistant Chief Trial Counsel
Florida Bar # 0976652
(202) 551-4469
[email protected]

Michael J. Friedman
New York Bar # 4297461
Assistant Chief Trial Counsel
(202) 551-7977
[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.  

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

 
  Defendants, and 
 

ASMAHAN MUFAREH 
 
  Relief Defendant. 
 

 

 
COMPLAINT FOR PERMANENT INJUNCTIVE  

AND OTHER RELIEF AND DEMAND FOR A JURY TRIAL  
 

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

for its 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 defendant Mufareh’s fraudulent 

and unregistered offering of securities targeting investors in the United States and 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 1 of 43 PageID 3



2 
 

around the world through his multi-level marketing (“MLM”) company, 

ONPASSIVE LLC. 

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

Mufareh in his individual capacity and later through ONPASSIVE, 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 a position in an 

MLM pyramid structure created by Mufareh for $97, locking in their positions 

before any launch of the purported product and before others began buying into the 

scheme in the future.  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. 

4. In addition to this early bird Founders promotion, potential investors 

were pitched on the notion that once the product was actually launched for 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 2 of 43 PageID 4



3 
 

commercial sale they and others would eventually be able 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 this payment 

would automatically be placed in a pyramid structure and eligible to receive as a 

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

them in the pyramid structure.   

5. 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.   

6. Defendants represented that they would engage in a marketing 

campaign ―once they launched ONPASSIVE’s purported suite of computer 

applications―to recruit other participants and direct the traffic to websites 

ONPASSIVE created for each Founder and participant joining post-launch using 

an automated process.   

7. Mufareh and ONPASSIVE also incentivized persons to recruit as 

many other participants as possible through an MLM structure, claiming a 

participant’s recruits would be placed under the participant and be sources of 

commissions paid to the participant.   

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 3 of 43 PageID 5



4 
 

8. 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. 

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

which is a 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 opportunity has never been 

registered with the SEC and no exemption from registration applies.  

10.   To further their fraudulent pyramid scheme, Mufareh and 

ONPASSIVE knowingly made repeated material 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.   

11. Further, to counter negative reviews of Mufareh and ONPASSIVE on 

existing MLM review websites, Mufareh and ONPASSIVE furtively created 

websites mimicking the names of the existing sites and on which ONPASSIVE 

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

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 4 of 43 PageID 6



5 
 

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

party reviews.    

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

Founder registrations.     

13. As of March 2023, ONPASSIVE had reaped over $108 million from 

the purchase of over 1.12 million Founders positions by over 800,000 investors 

located in the United States and abroad, and who paid $97 for each position in the 

pyramid scheme in advance of the supposed product launch.         

14. 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.   

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

for a fee or paid any commissions to investors.   

16. Rather than commit investor proceeds principally to develop and 

commercialize the purported software applications, Mufareh has used funds to 

further the pyramid scheme and for his and his spouse’s personal use.  Specifically, 

Mufareh transferred investors’ funds to his wife, 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 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 5 of 43 PageID 7



6 
 

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.   

VIOLATIONS 

17. By their conduct as alleged in this 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.   

18. Moreover, by his conduct as alleged in this 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 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. § 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 6 of 43 PageID 8



7 
 

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

78t(a)]. 

19. 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 Complaint or in acts, practices, transactions, and courses 

of business of similar types and objects. 

DEFENDANTS 

20. Ashraf “Ash” Mufareh, age 48, 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.  

21. 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, 

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 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 7 of 43 PageID 9



8 
 

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

done at Mufareh’s direction. 

RELIEF DEFENDANT 
 

22. Asmahan Mufareh, age 38, 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 

23. “Founders”  These are investors who registered on ONPASSIVE's 

Back Office prior to product sales occurring (or “pre-launch”) for the opportunity 

to be placed in a pyramid structure and ultimately eligible to receive as a 

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

them in the pyramid structure.  ONPASSIVE placed each Founder in the pyramid 

pre-launch in the order in which they registered.  The Defendants, however, did 

distinguish between Founders that paid the $97 pre-launch versus those that have 

not yet paid. The Defendants referred to Founders who have not yet paid as 

holding “free” positions.  The Defendants can 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.”  

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 8 of 43 PageID 10



9 
 

24. “Reseller” 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 

ONPASSIVE, once having made the election to be a “Reseller,” the 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 artificial 

intelligence.  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 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.       

25. “Leadership Council”  This refers to a group of highly productive 

and enthusiastic Founders selected by Mufareh to promote ONPASSIVE. 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 9 of 43 PageID 11



10 
 

26. “Back Office”  This refers to ONPASSIVE’s non-public website 

accessible by the over 800,000 investors who registered as “Founders,” or were 

granted access by Mufareh.   

27. “e-Book”  This refers 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, containing information 

concerning  ONPASSIVE’s MLM program. 

JURISDICTION AND VENUE 

28. 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)].   

29. 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 $97 to Defendants to be 

Founders.  Furthermore, Defendant Mufareh and Relief Defendant Asmahan 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 10 of 43 PageID 12



11 
 

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

this District. 

30. 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 Complaint, Defendants, directly and 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. The ONPASSIVE Multi-Level Marketing Program  

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

November 2018, began soliciting investors to ONPASSIVE which they pitched as 

a legitimate MLM program, the shared profits of which would purportedly come 

from monthly subscription fees to use online software applications, which 

ONPASSIVE has yet to fully develop and make available commercially.      

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 11 of 43 PageID 13



12 
 

32. 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.  ONPASSIVE’s Back Office 

contained informational e-Books which Mufareh reviewed, edited, and authorized 

to have posted.  Anyone registering as a Founder or granted access by Mufareh 

could access ONPASSIVE’s Back Office.  Founders who actively promoted 

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.    

33. ONPASSIVE’s promotional materials 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.  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 20 to over 50.       

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 12 of 43 PageID 14



13 
 

34. 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.   

35. Investors could purchase placement in the MLM pyramid in one of 

two ways: first, by paying $97 in advance of the product launch; and, second, by 

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

option, each investor would be placed in the pyramid in the order in which each 

registered.  “Founders” as a category of early investors were assured of being 

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.      

36. A visual depiction of the MLM opportunity, 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: 

 
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 MLM post-launch but not 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.  

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 13 of 43 PageID 15



14 
 

 

37. 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 indicated 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.   

38. According to Defendants’ promotional materials and communications 

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

product launch, a Founder has to have paid the $97 Founder’s fee, purchased a 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 14 of 43 PageID 16



15 
 

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 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.   

39. From inception, Defendants claimed that ONPASSIVE would begin 

paying commissions upon product launch, when it began collecting monthly 

subscription fees. 

40. 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 pyramid.  

41. By December 2021, Defendants had modified the MLM program 

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 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 15 of 43 PageID 17



16 
 

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

product launch.  Finally, in addition to purchasing a product and commencing 

payment of monthly subscription fees at product launch, in order to receive 

commissions, an investor―whether a Founder or 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.   

42. 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 the investor to purchase product, the only reason 

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

income streams.   

43. Although ONPASSIVE claimed that it ceased accepting Founder 

registrations effective June 22, 2022, Defendants have afforded those Founders 

holding “free” positions as of that date to pay the $97 Founder’s fee after that date, 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 16 of 43 PageID 18



17 
 

resulting in the payment of tens of millions of dollars in Founders’ fees in the 

ensuing period.    

B. Defendants Promoted the Plan, Emphasizing the Passive Income 
Opportunity through Recruitment  

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

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

pyramid the 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 

MLM pyramid.  Only a Founder could recruit other Founders, who would then be 

placed under and be sources of commissions for the recruiting Founder.   

45.  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 

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 MLM program 

from inception.  

46. Defendants also incentivized investors to join as early as possible by 

emphasizing that the earlier interested parties joined, the more highly placed they 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 17 of 43 PageID 19



18 
 

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

could earn in passive income from those placed under them.   

47. 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’s efforts to market the MLM opportunity and, post-launch, place 

recruits ONPASSIVE solicited directly under existing participants in the pyramid 

structure.      

48. While Defendants initially pitched the yet-to-be-released suite of 

applications to be for business owners looking to create an online presence to 

market their services or products, they also repeatedly told investors that they did 

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

product post-launch to market the ONPASSIVE program (and, implicitly, the 

passive income making opportunity), thereby populating the 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.    

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 18 of 43 PageID 20



19 
 

49. The most heavily marketed aspect of the fraudulent scheme to 

incentivize 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 misleading claims.   

50. For example, Defendants 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.   

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 19 of 43 PageID 21



20 
 

 

51. 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. 

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

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

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 20 of 43 PageID 22



21 
 

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.   

C. ONPASSIVE Is A Pyramid Scheme  

53. ONPASSIVE is a pyramid scheme.  As described above, 

ONPASSIVE offers investors in return for their payment of money the right to 

promote and sell ONPASSIVE’s purported product and receive income not 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 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.   

54. To earn commissions, an 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 who do not, so 

as to maximize their passive income streams.  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.  

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 21 of 43 PageID 23



22 
 

55. 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, over 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.   

56. Most ONPASSIVE investors are bound to lose money.  For example, 

to fully populate ten more levels of the pyramid beyond the ten levels depicted in 

paragraph 50 above 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 52 

above.   

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

was a pyramid scheme. 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 22 of 43 PageID 24



23 
 

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

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

Murfareh and ONPASSIVE promoted to investors.  

59. 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.  As CEO, co-owner, and the 

ultimate authority over all ONPASSIVE operations and statements, Mufareh’s 

scienter is imputable to ONPASSIVE.   

II. DEFENDANTS MADE MATERIAL MISREPRESENTATIONS IN  
FURTHERANCE OF THE ILLEGAL ONPASSIVE SCHEME 
 
60. In addition to operating a pyramid scheme, in furtherance of the 

scheme, Defendants made 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”  

  
61. During the Relevant Period, Defendants misrepresented to investors 

that ONPASSIVE was engaged in a legal business: 

a. Mufareh stated this expressly in webinars dated September 25, 

2018, July 18, 2019, and June 11, 2020, which were posted to the Back Office.  In 

a webinar dated August 29, 2019, Mufareh falsely declared that ONPASSIVE was 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 23 of 43 PageID 25



24 
 

“legal” in every country in which it operated, or there would be “workarounds” to 

make it legal.   

b. 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!”  

62. The foregoing misrepresentations were material because a reasonable 

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

whether to invest.  

63. Mufareh knew or was reckless in not knowing that the foregoing 

statements were materially false and misleading.  His whole course of dealings, as 

alleged in this 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  

 
64. 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, including 

the following: 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 24 of 43 PageID 26



25 
 

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.”  

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 25 of 43 PageID 27



26 
 

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.” 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 26 of 43 PageID 28



27 
 

65. 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 MLM pyramid structure, and marketing the ONPASSIVE income 

opportunity.  

66. 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.     

67. 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 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 27 of 43 PageID 29



28 
 

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.   

68. 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. 

69. 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 launch would 

likely occur within specified short timeframes would also have spurred Founders 

holding free positions to pay their $97 fees before the window closed.    

70. At the time he made each of the statements set forth in paragraph 64 

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 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 28 of 43 PageID 30



29 
 

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

applications in the timeframes specified.     

C. Defendants Created Counterfeit and Misleading Websites on 
Which to Post Fake Independent Third-Party Positive Reviews  

 
71. 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.  

72. Illustrative of the negative reviews were the following:  

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.” 

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

participants to “ignore the haters.”  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.  ONPASSIVE 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 29 of 43 PageID 31



30 
 

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.”  

74. 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. 

75. 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.  

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 30 of 43 PageID 32



31 
 

76. 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 
decide whether to approach a company or not to for any business or professional 
reasons. 
 

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.   

77. 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.”  

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 31 of 43 PageID 33



32 
 

78. 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 front of 

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

ONPASSIVE.” 

79. 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.    

80. 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.   

81. 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 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 32 of 43 PageID 34



33 
 

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

Founder.  

82. 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.  

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

counterfeit websites and posting of fake positive reviews of Mufareh and 

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.   

84. 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. 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 33 of 43 PageID 35



34 
 

III. DEFENDANTS AND RELIEF DEFENDANT ASMAHAN MUFAREH 
RECEIVED INVESTORS’ FUNDS 
 
85. As a result of the foregoing, as of March 2023, Defendants had raised 

in excess of $108 million in illicit proceeds from investors.  Investors made 

payments via 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.     

86.  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.   

87. Mufareh, ONPASSIVE, and Asmahan Mufareh have received ill-

gotten funds, and do not have a legitimate claim to those funds.  

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

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

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 34 of 43 PageID 36



35 
 

information allows investors to make informed judgments about whether to 

purchase the securities.   

89. 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.  

90. 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 MLM 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 MLM opportunity a profitable endeavor. 

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

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

security. 

92. 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.  

  

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 35 of 43 PageID 37



36 
 

FIRST CLAIM FOR RELIEF 
Unregistered Offers and Sales of Securities  

in Violation of Securities Act Sections 5(a) and 5(c)  
(Against Both Defendants)  

 
93. Paragraphs 1 through 92 are realleged and incorporated by reference 

as though fully set forth herein. 

94. Investors in Defendants’ pyramid-structured sales program made 

investments of money in a common enterprise about which they were led to expect 

profits from the efforts of Defendants or third parties. 

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

program constituted investment contracts, which are securities. 

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

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

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. 

97. 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)]. 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 36 of 43 PageID 38



37 
 

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

(Against Both Defendants)  
 

98. Paragraphs 1 through 92 are realleged and incorporated by reference 

as though fully set forth herein. 

99. 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; 

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; 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. 

100. 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)]. 

  

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 37 of 43 PageID 39



38 
 

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 Both Defendants) 
 

101. Paragraphs 1 through 92 are realleged and incorporated by reference 

as though fully set forth herein.  

102. 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:  

a. employed a device, scheme, or artifice to defraud; 

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; and  

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

operates or would operate as a fraud or deceit upon any person. 

103. 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. 

  

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 38 of 43 PageID 40



39 
 

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

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

 
104. The Commission re-alleges and incorporates by reference here the 

allegations in paragraphs 1 through 92 inclusive. 

105. As alleged above, ONPASSIVE violated Exchange Act Section 10(b) 

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

106. 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). 

107. 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 the Relief Defendant) 

 
108. Paragraphs 1 through 92 are realleged and incorporated by reference 

as though fully set forth herein.  

109. 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 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 39 of 43 PageID 41



40 
 

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

investors.” 

110. As alleged in paragraphs 1 through 92 above, 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. 

111. Relief Defendant Asmahan Mufareh obtained the funds and assets 

as part of and in furtherance of the securities violations alleged in paragraphs 1 

through 92 above 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: 

 

 

 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 40 of 43 PageID 42



41 
 

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 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 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 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)]. 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 41 of 43 PageID 43



42 
 

 

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 

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. 

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 42 of 43 PageID 44



43 
 

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. 

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, 

 
August 11, 2023    By: /s/ Gregory N. Miller 

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

 
Attorneys for Plaintiff 
Securities and Exchange Commission  

Case 6:23-cv-01539   Document 2   Filed 08/11/23   Page 43 of 43 PageID 45

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