IRL Social Media Faces $170 Million Fraud Allegations Amid Shutdown

Inside the Abraham Shafi Fraud Indictment and the IRL Funding Round

On Wednesday, August 27, 2025, the Department of Justice announced that a federal grand jury in Oakland charged Abraham Shafi, 38, with wire fraud, securities fraud, and obstruction of justice. These charges stem from his role as CEO of Get Together Inc., the parent company of IRL.

Following a funding round in 2021, the company achieved a valuation of approximately $1 billion. IRL, which marketed itself as a platform for organizing events and offline activities, appeared to gain massive traction in 2018, ranking among Apple’s top social apps. However, the indictment suggests that high valuations and popularity metrics masked significant undisclosed issues that exposed investors to massive losses.

Important Points About the Indictment and Funding

To understand why investor expectations diverged so sharply from reality, it is necessary to review the key facts surrounding the government’s case:

• Sole Defendant: Only Shafi was named in the DOJ indictment, focusing the criminal case squarely on the founder’s conduct.
• Potential Penalties: Each count in the indictment carries a potential maximum sentence of 20 years in prison.
• Prominent Backers: Investors in the IRL social platform included Peter Thiel’s Founders Fund and the venture firm Floodgate.
• High-Profile Connections: Shafi’s co-founders included Scott Banister, an early investor in Facebook and the first board member of PayPal.
• Parallel Civil Action: The Securities and Exchange Commission (SEC) previously filed a civil lawsuit against Shafi in July 2024 regarding similar schemes.

These details frame the high stakes surrounding the Abraham Shafi fraud case. The involvement of prominent venture capital firms and seasoned advisors illustrates that even high-profile backing does not immunize a company from alleged misconduct or protect investors from loss.

Investor Fallout and Legal Duties After Allegations at the IRL Social Platform

Alleged Misrepresentations and Spending

According to prosecutors, the alleged deception centered on user growth claims and marketing expenditures leading up to the Series C round. Authorities say Shafi spent “millions” on incentive advertising to boost app installs while simultaneously telling investors that the company spent “very little” on customer acquisition.

To conceal the true cost of this growth, the indictment alleges that Shafi routed invoices through a third-party firm, categorizing marketing spend as infrastructure or “infra costs.”

Furthermore, the charges extend to the personal use of company assets. Shafi is accused of using investor funds for:

• Luxury hotel stays and travel.
• High-end clothing and home furnishings.
• Art classes costing thousands of dollars.
• Wedding expenses, including hundreds of thousands of dollars for his own wedding and airfare for guests.

Investor Steps to Document and Pursue Potential Recovery

Investors affected by allegations around the IRL social media startup benefit from a disciplined plan of action. Strong documentation preserves claims and positions investors for negotiations or arbitration proceedings.

If you are an affected investor, consider taking the following steps:

• Gather Offering Materials: Compile all investor updates, pitch decks, and communications tied to the 2021 financing.
• Trace Your Investment: Locate bank wires, capital calls, and cap table entries confirming the specific dates and amounts of your investment.
• Preserve Representations: Save any emails or documents where growth metrics and marketing strategies were discussed or represented.
• Engage Legal Counsel: Consult with an attorney to evaluate potential claims for negligence, fraud, or breach of fiduciary duty.
• Coordinate Efforts: In many cases, coordinating with other investors can help align evidence while protecting individual financial interests.

These steps help create a clean evidentiary record, reducing factual disputes and aligning civil strategies with the ongoing regulatory matters.

Meyer Wilson Werning Helps Investors Address the IRL Social Media Fallout

The legal issues surrounding Abraham Shafi reveal how fast-growth stories can conceal undisclosed risks in tech fundraising. When representations diverge from reality, investors face avoidable harm and lasting uncertainty. The alleged misappropriation of $170 million at the IRL social platform underscores the need for transparent spending and honest metrics across the tech sector.

Robust oversight protects capital and deters misconduct, but gaps in controls can increase exposure and complicate recovery. If you’ve been affected by an investment that was found to be fraudulent or that you suspect might have been fraudulent, you’re not alone—the securities fraud lawyers at Meyer Wilson Werning can explain your legal rights. Contact us today to discuss your next steps.

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