Dear lljas,
Salâm,
Here it is:
http://www.dar-al-masnavi.org/n.a-I-0070.html
The context is not about false sufis. The verse comes early in the
first story of Masnavi, where the king is waiting for the arrival of
the holy physician that he dreamed would come (to heal the sick maiden
he had bought):
"Coming from afar, like the new moon (in slenderness and radiance): he
was non-existent, though existent in the form of phantasy. In the
spirit phantasy is as naught, (yet) behold a world (turning) on a
phantasy! Their peace and their war (turn) on a phantasy, and their
pride and their shame spring from a phantasy:"
--translated by Nicholson, 1926, Masnavi 1:68-71
The couplet, "Their sleeping and eating..." is not in the text, and is
presumably one of hundreds of verses that were added to the Masnavi
over the centuries.
Ibrahim