U.S. Trial Against MLM Scheme OnPassive Set For June 2025!

Fraud trial against MLM scheme OnPassive scheduled for June 2025
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In August 2023, the U.S. Securities and Exchange Commission (SEC) announced charges against Ashraf Mufareh and his company, OnPassive LLC, for orchestrating a fraudulent and unregistered offering. OnPassive claimed to be in the process of developing a range of computer applications powered by artificial intelligence and reportedly lured investors into an MLM scheme. These investors were promised passive income derived from subscription fees paid by subsequent investors.

Case Background

The SEC’s complaint alleges that, since 2018, the defendants have fraudulently raised over $108 million from over 800,000 global investors, including in the US. Investors’ income was supposed to start flowing upon the commercial launch of OnPassive‘s applications. However, as of June 2023, the defendants had neither launched any applications nor started disbursing commissions. The SEC alleges that the OnPassive program is essentially a pyramid scheme.

The complaint further states that the defendants made false claims regarding the launch timeline of their products, potential profits, and the legality of their operations. In an attempt to counter negative reviews on various MLM review platforms, the defendants are also accused of creating counterfeit websites and posting favorable reviews about themselves. These fake sites reportedly imitated the names and logos of genuine review platforms to mislead readers.

Upcoming Court Proceedings

Following a Case Management and Scheduling Order dated October 11th, the SEC’s trial against the OnPassive fraud is set to commence on June 2nd, 2025, BehindMLM reports. While the trial date is almost two years away, both parties are required to undergo mediation in the interim. Another order from October 11th mandates the SEC and OnPassive to select a mediator and set a mediation start date within two weeks of the order. The mediation process must be completed before December 16th, 2024.

Charges and Potential Consequences

The SEC’s complaint charges Ashraf Mufareh and OnPassive with violating the registration requirements and the antifraud provisions of the Securities Exchange Acts. The commission is seeking injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, civil penalties, and an officer and director bar against Mufareh. Additionally, Mufareh’s spouse, Asmahan Mufareh, has been named as a relief defendant in the complaint.

This case underscores the SEC’s commitment to protecting investors and ensuring the integrity of the securities market. As the proceedings unfold, it will be crucial to monitor the developments and the potential implications for the MLM industry.

Share Information

If you have any information about OnPassive, its operators and facilitators, or other scammers and their activities, please let us know via our whistleblower system, Whistle42.

CategoriesCourt Cases SEC
  1. 123Me says:

    Can somebody stop Ashraf Mufareh and Onpassive, please? We need to make sure people understand it’s a scam. Innocent people are falling for this (like one of my family members). She always says it starts “next month” and it has never happened.

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