A $108 Million Pyramid Scheme Built on Lies
The SEC just filed suit against OnPassive and its owner Ash Mufareh for running a $108 million fraud operation disguised as a passive income opportunity.
The scheme worked like this: OnPassive sold over 1.12 million "Founder positions" to more than 800,000 investors worldwide between 2019 and March 2023. Buyers paid a $97 fee upfront and monthly subscription charges, promised they could earn commissions without doing any actual work. They didn't have to recruit. They didn't have to sell anything. Just buy once, pay monthly, and the money would flow in passively. That was the pitch.
It was nonsense. The whole operation was a textbook pyramid scheme dressed up in corporate language.
The evidence is obvious. OnPassive convinced over 93,000 investors to buy multiple Founder positions. Think about that. If the product itself had real value, why would anyone need two positions? They wouldn't. The multiple purchases prove investors bought these positions for one reason only: the promised commissions, not any actual product utility.
Mufareh knew this. When critics started pointing out the obvious—that OnPassive looked like a pyramid scheme—he didn't deny the structure. Instead, he lied about the legality. In an August 2019 webinar, Mufareh declared OnPassive was "legal" in every country it operated, or they'd find "workarounds" to make it legal. That's a false statement from someone running the show.
It got worse. E-books that Mufareh personally reviewed, edited, and authorized for the company's back office made sweeping claims: "WE ARE FULLY LEGAL-WORLDWIDE" and "WE ARE FULLY COMPLIANT-WORLDWIDE." The materials promised that governments "WILL NOT be shut down by a government; THEY WILL USE OUR PRODUCTS!" Those statements were materially false, and the SEC says Mufareh knew it—or was reckless enough not to care.
When the investigative site BehindMLM correctly identified OnPassive as a pyramid scheme in January 2019, Mufareh didn't respond with facts. He tried to discredit the reporting through impersonation and fake reviews posted under BehindMLM's name. The SEC complaint documents these smear tactics.
The math on who loses is equally clear. The SEC alleges that most OnPassive investors are bound to lose money. That's what happens in pyramids. The structure requires constant recruitment to pay earlier investors. Once recruitment slows, it collapses. Everyone at the bottom gets wiped out.
Mufareh collected $108 million from people who wanted to believe they'd found an easy path to income. Instead, they found themselves at the bottom of a scam that funneled their money upward to the man at the top. Now the SEC is demanding he answer for it.
🤖 Quick Answer
What is the SEC lawsuit against OnPassive and Ash Mufareh about?The SEC filed suit alleging OnPassive operated a $108 million fraud scheme disguised as a passive income opportunity. The company sold over 1.12 million "Founder positions" to approximately 800,000 investors worldwide between 2019 and March 2023, charging upfront fees and monthly subscriptions while falsely promising commission earnings without actual work or recruitment requirements.
How did the OnPassive pyramid scheme operate?
OnPassive sold "Founder positions" for a $97 upfront fee plus monthly subscription charges. Investors were promised passive income through commissions without needing to recruit, sell products, or perform any work. The scheme targeted over 93,000 investors, generating $108 million through false earnings claims while lacking legitimate business operations or product distribution systems.
**What makes OnPassive's business
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