The founder of the company behind the IRL social media app was charged with defrauding investors of $170 million in the company's 2021funding round, the Department of Justice said Wednesday.
A federal grand jury in the Northern District of California indicted Abraham Shafi, 38 of Hawaii, with wire fraud, securities fraud and obstruction in connection with the scheme, the DOJ said.
Shafi was the CEO of Get Together, the parent company of IRL. The company was valued at $1 billion after its 2021 Series C funding round. IRL, which shuttered in June 2023, was a platform for users to organize events and offline activities. It found some traction in 2018, ranking among Apple's top social apps.
Shafi allegedly spent millions on incentive advertising to boost installs of the app leading up to the Series C while maintaining to investors that the company spent "very little" on getting new users, the DOJ said.
He then concealed the expense by invoicing it to another firm, the DOJ said.
The indictment also alleges that the CEO and his fiancée used investor funds for "luxury hotel stays, luxury clothing, purchases from home furnishing retailers, thousands of dollars for art classes, and hundreds of thousands of dollars for SHAFI's wedding, including payments for wedding guests' airfare and luxury hotels."