$108 Million Pyramid Scheme: How One Man Scammed Thousands in Florida

$108 Million Pyramid Scheme: How One Man Scammed Thousands in Florida

A person named Ashraf Mufarreh in Florida is currently facing allegations from the U.S. Securities and Exchange Commission (SEC) for reportedly orchestrating a fraudulent pyramid scheme that has raised over $108 million from more than 800,000 investors under false pretenses. Mufarreh is accused of operating this scheme in conjunction with his company OnPassive LLC, claiming it to be an artificial intelligence development company engaged in creating computer applications.

According to the SEC complaint, Mufarreh initially presented OnPassive as a company developing computer applications using artificial intelligence. He offered investors an opportunity to purchase a position within a multi-level marketing pyramid structure for $97, promising high returns and placement in the scheme. Those investors who joined quickly were labeled as “founders” and were led to believe that they would receive passive income from subsequent investors’ membership fees.

However, the SEC alleges that OnPassive failed to launch any application as promised or pay any commissions. The agency claims that Mufarreh provided false statements about the potential earnings and the validity of their operations when launching the product. They also assert that Mufarreh and his company created websites with fake positive reviews to deceive potential investors.

The complaint reveals that Mufarreh advanced the pyramid scheme and used investors’ funds for personal expenses. He transferred money to his wife through various bank accounts and invested in cryptocurrency assets under his control. The SEC seeks relief, including disgorgement of ill-gotten gains, civil penalties, and orders preventing Mufarreh from acting as an officer and director. Mufarreh’s wife, Asmahan Mufarreh, has also been named in the complaint as a relief defendant.

In response, Mufarreh’s lawyer stated that they are disappointed with the SEC’s allegations and deny the charges. They are cooperating with the SEC’s investigation and hope to demonstrate their innocence.