The social media founder of pandemic unicorn IRL was charged in a $170 million fraud, allegedly swindling investors by lying about its popularity and splurging company money on personal expenses, federal regulators said.
Abraham Shafi, the 37-year-old CEO of Get Together Inc, the parent company of the IRL platform, drummed up funding by claiming to have 12 million users worldwide, according to the Securities and Exchange Commission.
Shafi had boosted the numbers by blowing $6 million on an advertising campaign that “offered incentives to download the app,” the SEC alleged in the complaint filed Wednesday in US District Court for the Northern District of California.
He then “hid those expenditures with offering documents that significantly understated the company’s marketing expenses and by routing advertising platform payments through third parties,” the complaint said.
“Shafi took advantage of investors’ appetite for investments in the pre-IPO technology space and fraudulently raised approximately $170 million by lying about IRL’s business practices,” added Monique C. Winkler, the head of the SEC’s San Francisco office.
IRL, once valued at more than than $1 billion and considered a potential rival to Facebook, was shuttered in 2023 after investors uncovered evidence that the 20 million users it claimed to have at the time were nearly all fake.
One backer, SoftBank sued Shafi and demanded the return of its $150 million in funding as well as damages.
Shafi counter-sued, saying the claims were based on inaccurate data and that the bank was trying to divert attention away from its failed investment in beleaguered co-working venture WeWork.
SEC officials say Shafi further fleeced his investors by going on a spending spree of several million dollars using IRL company credits.
They said in their complaint that Shafi and his fiancee Barbara Woortmann blew the cash on furnitirue, clothes, high-end groceries and shacking up in Hawaii hotels.
The complaint demands Shafi pay back investors and seeks to bar him from holding directorship of companies.
The Post reached out to Shafi for comment.
Earlier this week, the SEC hit BitClout founder Nader Al-Naji with charges of fraud and unregistered offering of securities.
They claimed he used a pseudonymous online identity “DiamondHands” to avoid regulatory scrutiny while he raked in some $257 million in cryptocurrency.