{"id":58653,"date":"2025-08-27T23:20:16","date_gmt":"2025-08-28T03:20:16","guid":{"rendered":"https:\/\/bnonews.com\/?p=58653"},"modified":"2025-08-27T23:20:16","modified_gmt":"2025-08-28T03:20:16","slug":"founder-of-social-media-startup-irl-charged-in-170-million-fraud-scheme","status":"publish","type":"post","link":"https:\/\/bnonews.com\/index.php\/2025\/08\/founder-of-social-media-startup-irl-charged-in-170-million-fraud-scheme\/","title":{"rendered":"Founder of social media startup IRL charged in $170 million fraud scheme"},"content":{"rendered":"\n<p>The founder and former CEO of the social media startup IRL has been indicted on federal charges of wire fraud, securities fraud, and obstruction in connection with a $170 million investment scheme, according to the U.S. Justice Department.<\/p>\n\n\n\n<p>Court documents allege that Abraham Shafi, 38, of Pepeekeo, Hawaii, misled investors during IRL\u2019s 2021 Series C funding round, which raised $170 million at a valuation of more than $1 billion. <\/p>\n\n\n\n<p>Prosecutors <a href=\"https:\/\/www.justice.gov\/opa\/pr\/former-silicon-valley-ceo-charged-fraud-and-obstruction-justice\">said<\/a> Shafi falsely told investors that the company spent little on advertising and that new user signups were organic, while in fact millions of dollars were spent on incentive-based ads in which users were rewarded for downloading the app.<\/p>\n\n\n\n<p>Investigators said Shafi concealed the ad spending by routing invoices through a third-party firm so the expenses would not appear on IRL\u2019s books. <\/p>\n\n\n\n<p>After securing funding, he allegedly ordered employees to create false invoices labeling the ad costs as infrastructure spending and continued to misrepresent the company\u2019s finances.<\/p>\n\n\n\n<p>When the Securities and Exchange Commission opened an investigation, Shafi allegedly deleted records from his phone and told employees to lie about his involvement, according to the indictment.<\/p>\n\n\n\n<p>IRL, short for \u201cIn Real Life,\u201d was promoted as a platform to help people organize social events. Shafi told <a href=\"https:\/\/www.cnbc.com\/2025\/08\/27\/founder-irl-social-media-fraud.html\">CNBC<\/a> in 2018 that investors supported the company for its potential to compete with Facebook and Snapchat. <\/p>\n\n\n\n<p>Backers included prominent venture firms such as Peter Thiel\u2019s Founders Fund and Floodgate. Co-founders included Scott Banister, an early investor in Facebook and the first board member of PayPal, CNBC reported.<\/p>\n\n\n\n<p>If convicted, Shafi faces up to 20 years in prison on each count. The FBI is investigating the case.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The founder and former CEO of the social media startup IRL has been indicted on federal charges of wire fraud, securities fraud, and obstruction in connection with a $170 million investment scheme, according to the U.S. Justice Department. Court documents allege that Abraham Shafi, 38, of Pepeekeo, Hawaii, misled investors during IRL\u2019s 2021 Series C [&hellip;]<\/p>\n","protected":false},"author":7,"featured_media":58654,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[4],"tags":[3393,2401,151],"class_list":["post-58653","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-fraud","tag-social-media","tag-united-states"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Founder of social media startup IRL charged in $170 million fraud scheme - BNO News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/bnonews.com\/index.php\/2025\/08\/founder-of-social-media-startup-irl-charged-in-170-million-fraud-scheme\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Founder of social media startup IRL charged in $170 million fraud scheme - BNO News\" \/>\n<meta property=\"og:description\" content=\"The founder and former CEO of the social media startup IRL has been indicted on federal charges of wire fraud, securities fraud, and obstruction in connection with a $170 million investment scheme, according to the U.S. Justice Department. 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