The social media founder of pandemic unicorn IRL has been charged with fraud of $170 million for lying about the company’s popularity and defrauding investors by spending company money on personal expenses, according to federal regulators.
Abraham Shafi, the 37-year-old CEO of Get Together Inc., the IRL platform’s parent company, raised the money by claiming to have 12 million users worldwide, according to the U.S. Securities and Exchange Commission.
In a complaint filed Wednesday in the U.S. District Court for the Northern District of California, the SEC alleged that Shafi inflated the numbers by spending $6 million on an advertising campaign “offering incentives to download the app.”
He then “concealed these expenditures through offering documents that materially understated the company’s marketing expenses and by outsourcing advertising platform payments to third parties,” the lawsuit states.
“Shafi exploited investor appetite for pre-IPO technology investments and fraudulently raised approximately $170 million by lying about IRL’s business practices,” added Monique C. Winkler, Director of the SEC’s San Francisco Office.
IRL was once worth over $1 billion. It is seen as a potential rival to Facebookwas shut down in 2023 after investors found evidence that nearly all of the 20 million users it claimed at the time were fake.
One of the backers, SoftBank, sued Shafi, demanding restitution of $150 million in funds and damages.
Shafi countersued, arguing the claims were based on inaccurate data and that the bank was trying to divert attention from its failed investment in troubled co-working venture WeWork.
SEC officials say Shafi used IRL’s corporate credit to squander millions of dollars and further swindle investors out of their money.
According to the indictment, Shafi and his fiancée, Barbara Waltman, squandered the cash on furniture, clothes, luxury food and a hotel stay in Hawaii.
The lawsuit seeks to require Shafi to repay investors and bar him from serving on the company’s board of directors.
The Post has reached out to Shafi for comment.
Earlier this week, the SEC charged BitClout founder Nader Al-Naji with fraud and making an unregistered securities offering.
To evade authorities, he used a pseudonymous online identity called “DiamondHands” and claimed to have made approximately $257 million in cryptocurrency.
