SEC v. Abraham Shafi; and Barbara Woortmann, No. 4:24-cv-04636, Northern District of California (Aug. 6, 2024) — Complaint

COMPLAINT

SEC v. SHAFI

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MONIQUE C. WINKLER (Cal. Bar No. 213031)
JASON H. LEE (Cal. Bar No. 253140)
MARC KATZ (Cal. Bar No. 189534)
  [email protected]
MATTHEW MEYERHOFER (Cal. Bar No. 268559)
  [email protected]

Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
44 Montgomery Street, Suite 2800
San Francisco, CA 94104
(415) 705-2500 (Telephone)
(415) 705-2501 (Facsimile)
SECURITIES AND EXCHANGE COMMISSION,

                        Plaintiff,

            vs.

ABRAHAM SHAFI,

  Defendant,

and

BARBARA WOORTMANN,

                                    Relief            Defendant.

Case No.

COMPLAINT

Plaintiff Securities and Exchange Commission (the “SEC”) alleges:
SUMMARY OF THE ACTION
1. From at least March through June of 2021, Abraham Shafi (“Shafi”) engaged in a
fraudulent scheme to mislead investors and sell about $170 million of preferred stock in Get
Together, Inc. (more commonly known as “IRL”), a social media platform that he co-founded and
then led as its Chief Executive Officer until April 2023.
2.  Shafi described IRL as an app that had attracted 12 million purported users and
achieved a high rank in the Apple App Store based on viral popularity and organic growth. This
description misleadingly omitted the significant role that advertising played in Shafi’s growth
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA

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strategy for IRL. Since the fall of 2019, Shafi had promoted IRL and boosted its perceived
popularity by spending millions of dollars on “incent” advertisements—advertisements that
offered users incentives to download the app.
3. Moreover, Shafi did not simply fail to disclose IRL’s use of incent advertisements.
He also made false statements about IRL’s advertising expenditures, providing prospective
investors with offering materials that significantly understated the amount of money that IRL had
spent on marketing-related expenses. Shafi also routed payments to IRL’s largest incent
advertising platform through third parties, in an apparent effort to conceal the true nature of those
payments.
4. Shafi’s deception had another dimension as well. He hid from investors that, prior
to the 2021 offering, he and his then-fiancée, Barbara Woortmann (“Woortmann”), who was never
employed by IRL, had charged at least hundreds of thousands of dollars in personal expenses to
IRL business credit cards they possessed. These charges covered items such as clothing, home
furnishings, travel, and everyday living expenses. Shafi used IRL’s bank account to pay the
monthly balances on these credit cards.
5. Investors, unaware that IRL had spent millions of dollars on incent advertisements
and ignorant of Shafi and Woortmann’s misuse of IRL’s credit cards, purchased a total of about
$170 million in IRL preferred stock in connection with IRL’s “Series C” private offering. The lead
investor, “VC1,” a venture capital fund, purchased about $125 million worth of IRL securities
from IRL and about $7.5 million worth of IRL securities directly from Shafi. Another venture
capital fund, “VC2,” purchased about $10 million worth of IRL securities from IRL.
6. After the Series C offering closed, Shafi continued to deceive investors, whose
representatives held seats on IRL’s Board of Directors. He orchestrated a scheme to continue
hiding IRL’s large advertising expenditures—including its expenditures on incent ads—by
directing one of IRL’s vendors to submit invoices that underreported IRL’s advertising-related
costs. Shafi and Woortmann also continued charging what ultimately amounted to millions of
dollars in personal expenses to IRL’s business credit cards. Among other things, Shafi used his

COMPLAINT

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IRL credit card to pay for hundreds of thousands of dollars of expenses related to his April 2022
wedding to Woortmann, including wedding guests’ airfare and luxury hotel accommodations.
7. A Special Committee of IRL’s Board of Directors removed Shafi as IRL’s CEO in
late April 2023, after discovering Shafi and Woortmann’s practice of charging personal expenses
to their IRL business credit cards. Shortly afterwards, IRL’s reported user population collapsed. A
forensic analysis undertaken at the direction of the Special Committee determined that, prior to the
collapse, a substantial percentage of IRL’s users were likely bots. IRL’s Board of Directors
subsequently decided to wind down the company.
8. Shafi violated the antifraud provisions of the federal securities laws. Specifically,
Shafi violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)]
and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)]
and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. Woortmann was unjustly enriched by Shafi’s
violations.
JURISDICTION AND VENUE
9. The SEC brings this action pursuant to Sections 20(b), 20(d), and 22(a) of the
Securities Act [15 U.S.C. §§ 77t(b), 77t(d), and 77v(a)], and Sections 21(d), 21(e), and 27 of the
Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].
10. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d)(1),
and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d)(1), and 77v(a)], and Sections 21(d),
21(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].
11. Shafi, directly or indirectly, made use of the means and instrumentalities of
interstate commerce or of the mails in connection with the acts, transactions, practices, and courses
of business alleged in this complaint.
12. Venue is proper in this District pursuant to Section 22(a) of the Securities Act [15
U.S.C. § 77v(a)], and Section 27(a) of the Exchange Act [15 U.S.C. § 78aa(a)]. Acts, transactions,
practices, and courses of business that form the basis for the violations alleged in this complaint
occurred in this District. For example, IRL’s principal place of business during all relevant times
was located in Berkeley, CA.

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13. Under Civil Local Rule 3-2(d), this civil action should be assigned to the Oakland
Division because a substantial part of the events or omissions which give rise to the claims alleged
herein occurred in Alameda County.
DEFENDANT AND RELIEF DEFENDANT
14. Defendant Abraham Shafi, age 37, resides in Pepeekeo, Hawaii. He co-founded
IRL and was its CEO until April 2023.
15. Relief Defendant Barbara Woortmann, age 35, resides in Pepeekeo, Hawaii. She
is Shafi’s wife.
RELATED ENTITY
16. Get Together, Inc. is a Delaware corporation. During the period relevant to this
action, its principal place of business was in Berkeley, CA.
FACTUAL ALLEGATIONS
A. Shafi Used “Incent” Advertisements to Attract IRL Downloads and Users.
17. Shafi and his co-founders created the IRL social media app in 2018. They launched
IRL with the intention of building a social media platform centered on events that people would
attend together, initially “in real life” and later remotely as well.
18. In September 2019, Shafi began promoting IRL using “incent” advertisements. An
incent advertisement is an ad that offers users a reward that is unrelated to the app itself in
exchange for downloading the advertised app. For example, someone playing a game on their
phone or computer might be offered extra “lives” or “gems” to use in the game in exchange for
downloading a second app that is unrelated to the game. Or a potential user might be offered
“points,” which could be redeemed for gift cards, in exchange for downloading an app.
19. Incent ads are attractive to some app developers because they can be used to drive a
large volume of downloads, quickly, at low cost. Traditional online advertising can cost an app
developer as much as $5 to $7 per download, whereas incent ads can generate downloads at a cost
of less than $1 each. But because users who download an app via an incent ad are incentivized by a
reward unrelated to the app, they are less likely to turn into long-term users.

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20. In September 2019, Shafi began using incent advertising platforms to promote IRL.
He told representatives of these platforms that his goal was to drive large download volumes and
thereby achieve a high rank in the Apple App Store.
21. Between September 2019 and April 2021, Shafi caused IRL to spend about $5.7
million on incent advertisements. This spending had the desired effect: IRL became an app that
regularly ranked in the top 20, and sometimes in the top 10, of social media apps in the Apple App
Store.
B. Shafi Routed IRL’s Payments To Its Principal Incent Advertising Platform
Through Intermediaries.
22. Soon after IRL started using incent advertisements, Shafi asked one of his
acquaintances, “Individual 1,” to handle IRL’s payments to IRL’s principal incent advertising
platform (the “Incent Ad Platform”). Every two weeks, the Incent Ad Platform would send an
invoice for IRL’s incent advertisements to Individual 1. Individual 1 would then ask Shafi to send
him enough money to pay the invoice, and IRL would transfer money to pay the invoice to an
entity controlled by Individual 1. That entity would then pay the Incent Ad Platform on IRL’s
behalf.
23. In October 2020, Shafi hired a business entity (the “Agency”) owned and managed
by another one of his acquaintances, “Individual 2,” to assist with IRL’s marketing and advertising
efforts. The Agency then took over the payment-intermediary role from Individual 1, following the
same general procedure to pay the Incent Ad Platform’s invoices for IRL.
C. Shafi and Woortmann Used IRL Credit Cards and Bank Accounts To Pay For
Personal Expenses.
24. In 2017, Shafi obtained a business credit card account for “GATHERAPP INC.”, a
predecessor business to IRL. No later than January 2019, Shafi had obtained a second credit card
on the same account for Woortmann. Around the beginning of 2020, the business associated with
the account formally changed from GATHERAPP INC. to Get Together, Inc. Woortmann was
never an employee or contractor of IRL.

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25. Beginning no later than January 2019 and continuing until at least September 2022,
Shafi and Woortmann used these credit cards to pay for millions of dollars in personal expenses.
These expenses included: purchases from home improvement and home furnishing retailers;
purchases from clothing and jewelry retailers; airfare; stays at luxury hotels in Hawaii and
elsewhere; everyday expenses from restaurants, grocery stores, food delivery apps, and rideshare
apps; and PayPal and Venmo payments that appear to be of a personal nature, including payments
to Woortmann’s family and friends.
26. From at least January 2019 until September 2022, Shafi typically paid the monthly
bills on the IRL business credit cards, which included these millions of dollars in personal
expenses, using funds from IRL’s bank account. During that three-and-a-half-year period, it
appears that Shafi made only one payment against the IRL business credit card account balance
using funds from his own personal bank account: a $150,000 payment in April 2021.
D. Shafi and IRL Sold About $170 Million Worth of IRL Securities While
Concealing IRL’s Reliance On Incent Advertisements And Shafi and
Woortmann’s Use of IRL’s Credit Card Account To Pay For Personal Expenses.
27. From at least March through June of 2021, IRL solicited VC1, VC2, and other
entities for investments in IRL. As IRL’s CEO, Shafi had ultimate authority over the offering
documents that he shared with prospective investors.
28. During the offering process, Shafi presented IRL as an app that had achieved
impressive growth organically—meaning from users who did not sign up via a paid
advertisement—and thereby achieved a high rank in the Apple App Store. He misleadingly
omitted any reference to incent ads from the materials he shared with investors. He also provided
investors with documents that significantly underreported IRL’s advertising expenses.
29. For example, Shafi provided prospective investors with a “Spend Summary” that
purported to break down IRL’s operating expenses into several categories on a month-by-month
basis from January 2020 to February 2021. This document reported that IRL’s total PR/marketing
expenses averaged out to less than $40,000 per month. In reality, from January 2020 to February
2021, IRL spent, on average, more than $200,000 per month on the Incent Ad Platform alone. In

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March and April 2021, IRL’s spending on the Incent Ad Platform increased to about $500,000 per
month.
30. During a March 16, 2021 text message conversation between Shafi and the
Managing Partner of VC2, Shafi sent the Managing Partner text messages with excerpts from the
“Spend Summary.” The Managing Partner remarked that another prospective investor would
“love” that IRL “spent virtually zero on marketing.” Shafi misleadingly replied, “That’s us! Real
social.”
31. On April 19, 2021, Shafi sent VC1 a question-and-answer (“Q&A”) document
claiming that IRL spent about $50,000 per month on advertising. The same document misleadingly
attributed IRL’s high rank in the Apple App Store to “organic channels,” without mentioning
IRL’s use of incent advertisements. Shafi reviewed the Q&A document before he sent it to VC1.
Shafi shared the Q&A document with other investors as well.
32. Shafi knew, or was reckless in not knowing, that IRL’s true advertising
expenditures were much higher than $50,000 per month. Shafi was aware of the true magnitude of
IRL’s expenditures on the Incent Ad Platform from his communications with Individual 1 and
from his communications with a representative of that platform. For example, during a December
1, 2020 chat discussion with a representative of the Incent Ad Platform, Shafi wrote, “I spend
millions with you. I expect some basic treatment.” In an April 9, 2021 chat discussion, the same
representative informed Shafi that IRL’s spending on incent advertisements had increased to
between $15,000 and $17,000 per day.
33. On April 13, 2021, Shafi sent VC1 a slide presentation. Shafi included information
in this slide presentation touting that IRL was highly ranked in the Apple App Store. But again, the
presentation made no mention of the fact that IRL had used incent advertising to achieve this rank.
Shafi reviewed the slide presentation before sending it to VC1. Shafi shared the slide presentation
with other investors as well.
34. Additionally, on or around April 21, 2021, Shafi sent emails to VC1 and other
investors attributing a surge in downloads of the IRL app that had occurred in the fall of 2019 to
“seasonality around the holidays.” As Shafi knew, or was reckless in not knowing, these emails

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were misleading because they omitted that the surge occurred around the same time IRL started
spending heavily on incent advertising.
35. IRL investors considered these false and misleading statements to be important to
their decisions to invest in IRL. Investors viewed IRL’s high app store rank as evidence of the
app’s popularity and success in acquiring customers. Investors considered the amount of money
IRL spent on marketing and advertising to be important because, for example, the false lower
figures presented to investors by Shafi suggested that the app was growing efficiently and could
eventually become profitable. VC1 considered information about IRL’s user acquisition channels
to be important because such information was relevant to understanding IRL’s popularity as well
as its cost structure.
36. On April 23, 2021, shortly before VC1 provided Shafi with a term sheet outlining a
potential investment deal, Shafi told a representative of VC1 that IRL had received multiple term
sheets from other prospective investors valuing IRL at $1 billion. As Shafi knew, or was reckless
in not knowing, this was false. At that time, IRL had received only one tentative term sheet from a
prospective investor, and that investor had withdrawn the term sheet a month earlier, on March 23,
just one day after sending it.
37. On May 18, 2021, VC1, VC2, and other investors entered into a Preferred Stock
Purchase Agreement (“PSPA”) with IRL. Shafi signed the PSPA on behalf of IRL.
38. In the PSPA, Shafi and IRL represented that IRL would use the proceeds from the
Series C offering “for general corporate and working capital purposes.” As Shafi knew, or was
reckless in not knowing, this statement was misleading because the PSPA failed to disclose that
Shafi and Woortmann regularly used IRL’s business credit cards to pay for their personal
expenses, and used IRL’s funds to pay the monthly credit card bills. As Shafi knew, or was
reckless in not knowing, this statement was also misleading because the PSPA did not disclose that
Shafi and Woortmann would continue charging personal expenses to IRL’s business credit cards,
and that they would use proceeds from the Series C offering to pay the monthly credit card bills.
39. In the PSPA, Shafi and IRL also represented that “none of [IRL’s] directors,
officers or employees, or any members of their immediate families . . . are, directly or indirectly,

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indebted to [IRL].”

 As Shafi knew, or was reckless in not knowing, this statement was false and
misleading because, by charging personal expenses to IRL business credit cards, Shafi and
Woortmann were incurring at least hundreds of thousands of dollars in liability to IRL for
misappropriating IRL’s funds.
40. In the PSPA, Shafi and IRL also represented that there were “no agreements,
understandings, or proposed transactions (in any case oral or written) between [IRL] and any of its
officers” other than (i) “standard employee benefits generally made available to all employes . . .,”
(ii) “standard director and officer indemnification agreements approved by the Board of
Directors,” (iii) “inventions assignment agreements . . . ,” and (iv) “the purchase of shares . . . and
the issuance of options . . . in each instance, approved in the written minutes of the Board of
Directors.” As Shafi knew, or was reckless in not knowing, this statement was misleading because
it did not disclose Shafi’s practice of charging personal expenses to his IRL business credit card.
41. Neither Shafi nor IRL disclosed that Shafi and Woortmann had a longstanding
practice of paying for personal expenses using IRL’s business credit cards and had, by May 2021,
already charged at least hundreds of thousands of dollars in personal expenses to those credit cards.
42. Had they known about it, IRL’s investors would have considered information about
Shafi’s use of an IRL business credit card to pay for personal expenses to be important to their
investment decisions because such use called into question Shafi’s judgment as a CEO. When a
Special Committee of IRL’s Board of Directors, which included representatives from VC1 and
VC2, eventually learned that Shafi and Woortmann had been using their IRL business credit cards
to pay for personal expenses, the committee removed Shafi as IRL’s CEO.
43. Pursuant to the May 18, 2021 PSPA, VC1 purchased about $125 million of IRL
preferred stock directly from IRL, and VC2 purchased about $10 million of IRL preferred stock
from IRL.

In total, IRL sold about $145 million of preferred stock to investors in connection with
the Series C offering, which had closing dates on May 18, 2021, June 1, 2021, June 14, 2021, and
June 17, 2021.
44. At the same time, VC1 also purchased about $25 million of IRL securities from
existing IRL employees, including about $7.5 million directly from Shafi.

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45. After the Series C offering closed, Shafi unilaterally raised his own salary from
about $400,000 to about $1 million per year. He did not inform IRL investors or IRL’s Board of
Directors about this raise until more than a year later, in October 2022.
E. After the 2021 Securities Offering, Shafi Continued To Conceal From Investors
IRL’s Reliance On Incent Advertising By Directing A Scheme To Falsify The
Company’s Financial Statements.
46. On May 19, 2021, Shafi hired Individual 2 as IRL’s “Director of Growth.” In this
role, Individual 2 was responsible for managing IRL’s paid media and growing IRL’s user base.
Individual 2 also continued to manage the Agency, and the Agency continued to pay IRL’s
invoices from the Incent Ad Platform. Over time, the Agency came to manage and pay some of
IRL’s other marketing and advertising vendors as well.
47. In August 2021, IRL hired its first Chief Financial Officer (“CFO”). In order to
better track IRL’s expenses and to prepare quarterly financial reports for IRL’s Board of Directors
(which included representatives from VC1 and VC2), IRL’s CFO asked Individual 2 to create
monthly invoices describing the services that the Agency was providing to IRL. IRL’s CFO asked
Individual 2 to create invoices both on a going-forward basis and for the work that the Agency had
done for IRL in the past.
48. Shafi directed Individual 2 to create invoices that did not accurately reflect the
work that the Agency had performed, and was continuing to perform, for IRL. Specifically, Shafi
directed that on each of the Agency’s monthly invoices, the Agency should allocate 90% of its
charges to a line item titled “Infra Cost,” regardless of the true nature of the Agency’s work for
IRL or expenditures on behalf of IRL. Shafi directed that only a small portion of each invoice be
allocated to a line item called “Growth Cost.” Shafi further directed that the invoices should state,
“Infra cost relates to Amazon Web Services, SMS, Google Cloud costs.” Individual 2 prepared
Agency invoices pursuant to Shafi’s directions and provided those invoices to IRL’s CFO.
49. As Shafi knew, or was reckless in not knowing, these invoices were false and
misleading. Most of the money that IRL paid the Agency each month—both before and after the
Series C offering—was used to pay IRL’s marketing and advertising vendors, including the Incent

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Ad Platform. Relatively little of the money that the Agency paid on IRL’s behalf went to actual
infrastructure providers like Amazon Web Services or Google Cloud, or to SMS messaging
services.
50. IRL’s financial employees and contractors relied on the Agency’s invoices in
preparing quarterly financial reports for IRL’s Board of Directors. Because the Agency’s invoices
falsely allocated the majority of the Agency’s charges to “Infra Cost,” those financial reports
significantly overstated the amount of money IRL was spending on infrastructure expenses and
significantly understated the amount of money IRL was spending on marketing and advertising
expenses.
51. For example, the financial reports prepared for the Board of Directors showed that,
in 2021, IRL had about $4.2 million in “growth” expenses and about $13.5 million in infrastructure
expenses. IRL’s true 2021 expenses were the reverse of this: more than $14.2 million in growth
expenses, and only about $3.4 million in infrastructure expenses.
F. After the Series C Offering, Shafi and Woortmann Continued To Use IRL’s
Business Credit Cards To Pay For Personal Expenses.
52. After the Series C offering closed, Shafi and Woortmann continued to use IRL’s
business credit cards to pay for millions of dollars in additional personal expenses, including
clothing and jewelry expenses, travel expenses, everyday living expenses, and home improvement
and home furnishing expenses. Among other things, Shafi and Woortmann used the IRL credit
cards to pay for hundreds of thousands of dollars in airfare and luxury hotel expenses for guests at
their April 2022 wedding.
53. In late 2021, IRL’s CFO discovered that Shafi and Woortmann had been charging
what appeared to be personal expenses to IRL’s business credit cards. After the CFO confronted
Shafi about these expenses, Shafi admitted that he and Woortmann had been charging personal
expenses to their IRL credit cards. Shafi also agreed to pay back the expenses that he admitted
were personal in nature.

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54. But Shafi maintained that some of the expenses the CFO asked about were genuine
business expenses. The CFO asked Shafi to provide receipts documenting these purported business
expenses, but Shafi provided the CFO with relatively few such receipts.
55. After Shafi admitted to the CFO that he and Woortmann had been charging
personal expenses to their IRL business credit cards, the couple continued to charge additional
personal expenses to those credit cards. Shafi never did anything to memorialize
contemporaneously which expenses on his IRL business credit card were business expenses and
which ones were personal expenses.
56. Between December 2021 and January 2023, Shafi reimbursed IRL for about $2.5
million of his and Woortmann’s personal expenses. But Shafi did not reimburse IRL for other
expenses that, based on available credit card and digital payment platform records, appear to be
personal in nature. Examples of charges that appear to be personal in nature and not yet reimbursed
include the following:
a. Two June 21, 2021 charges on Woortmann’s IRL credit card, of $12,074.92 and
$4,100.90, at a merchant that appears to provide goods and services related to
spirituality and alternative medicine;
b. An October 3, 2021 charge on Shafi’s IRL credit card of $34,714.75, identified on
the credit card statement as a luxury resort hotel on the island of Hawaii;

c. A December 23, 2021 charge on Woortmann’s IRL credit card of $21,712.25,
identified on the credit card statement as a luxury resort hotel on the island of
Hawaii; and
d. A May 15, 2022 charge on Shafi’s IRL credit card of $4,367.88, identified on the
credit card statement as a luxury resort hotel on the island of Lanai.
G. A Special Committee of IRL’s Board of Directors Removed Shafi As CEO And
Determined That a Substantial Percentage Of IRL’s Users Were Likely Bots.
57. IRL’s Board of Directors did not learn about Shafi and Woortmann’s use of IRL
credit cards for personal expenses until April 2023. At that point, a Special Committee of IRL’s
Board of Directors removed Shafi as IRL’s CEO.

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58. Shortly after the Special Committee removed Shafi from the CEO role, IRL’s
purported number of users plummeted. A forensic analysis undertaken at the direction of the
Special Committee determined that, prior to the collapse, a substantial percentage of IRL’s users
were likely bots. More specifically, the analysis determined that 95% of users for which detailed
usage data were available were likely bots, and that the accounts for which such data were not
available were also unlikely to be representative of human activity.
FIRST CLAIM FOR RELIEF (Shafi Only)
Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder
59. The SEC re-alleges and incorporates by reference Paragraph Nos. 1 through 58.
60. Shafi, by engaging in the conduct described above, directly or indirectly, in
connection with the purchase or sale of securities, by use of means or instrumentalities of interstate
commerce, or of the mails, with scienter:
a. Employed devices, schemes, or artifices to defraud;
b. Made untrue statements of material facts or omitted to state material facts
necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading; and
c. Engaged in acts, practices, or courses of business which operated or would
operate as a fraud or deceit upon other persons, including purchasers of
securities.
61. By reason of the foregoing, Shafi violated, and unless restrained and enjoined will
continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5
thereunder [17 C.F.R. § 240.10b-5].
SECOND CLAIM FOR RELIEF (Shafi Only)
Violations of Section 17(a) of the Securities Act
62. The SEC re-alleges and incorporates by reference Paragraph Nos. 1 through 58.
63. Shafi, by engaging in the conduct described above, directly or indirectly, in the
offer or sale of securities, by use of the means or instruments of transportation or communication
in interstate commerce or by use of the mails:

COMPLAINT

SEC v. SHAFI

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a. with scienter, employed devices, schemes, or artifices to defraud;
b. obtained money or property by means of untrue statements of material fact
or by omitting to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they were
made, not misleading; and
c. engaged in transactions, practices, or courses of business which operated or
would operate as a fraud or deceit upon purchasers.
64. By reason of the foregoing, Shafi violated, and unless restrained and enjoined will
continue to violate, Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)].
THIRD CLAIM FOR RELIEF (Woortmann Only)
Relief Defendant – Unjust Enrichment
65. The SEC re-alleges and incorporates by reference Paragraphs 1 through 58.
66. Woortmann, through her use of an IRL business credit card to pay for personal
expenses, has been unjustly enriched under circumstances in which it is not just, equitable, or
conscionable for her to retain such funds.
PRAYER FOR RELIEF
WHEREFORE, the SEC respectfully requests that the Court:
I.
Permanently enjoin Shafi from violating, directly or indirectly, Section 10(b) of the
Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 [17 C.F.R. § 240.10b-5] thereunder, and
Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)].
II.
Permanently enjoin Shafi from directly or indirectly, including, but not limited to, through
any entity owned or controlled by him, participating in the issuance, purchase, offer, or sale of any
securities, provided however, that such injunction shall not prevent Shafi from purchasing or
selling securities for his own personal accounts.

COMPLAINT

SEC v. SHAFI

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III.
Permanently bar Shafi from serving as an officer or director of any issuer having a class of
securities registered with the SEC pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l] or
that is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)],
pursuant to Section 20(e) of the Securities Act [15 U.S.C. § 77t(e)] and Section 21(d)(2) of the
Exchange Act [15 U.S.C. § 78u(d)(2)].
IV.
Order Shafi to disgorge all ill-gotten gains received as a result of his unlawful conduct plus
prejudgment interest thereon pursuant to Sections 21(d)(3), 21(d)(5), and 21(d)(7) of the Exchange
Act [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)].
V.
Order Shafi to pay a civil monetary penalty pursuant to Section 20(d) of the Securities Act
[15 U.S.C. § 77t(d)], and Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)].
VI.
 Order Woortmann to disgorge the ill-gotten gains or unjust enrichment she obtained or
derived from Shafi’s unlawful conduct, together with prejudgment interest on all such amounts.
VII.
Retain jurisdiction of this action in accordance with the principles of equity and the Federal
Rules of Civil Procedure in order to implement and carry out the terms of all orders and decrees
that may be entered, or to entertain any suitable application or motion for additional relief within
the jurisdiction of this Court.

COMPLAINT

SEC v. SHAFI

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VIII.
Grant such other and further relief as this Court may determine to be just, equitable, and
necessary.

Dated:  July 31, 2024                            Respectfully            submitted,

  /s/ Matthew Meyerhofer
Matthew Meyerhofer
Attorney for Plaintiff
SECURITIES AND EXCHANGE COMMISSION

COMPLAINT  
  SEC v. SHAFI 

 

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MONIQUE C. WINKLER (Cal. Bar No. 213031) 
JASON H. LEE (Cal. Bar No. 253140) 
MARC KATZ (Cal. Bar No. 189534) 
  [email protected] 
MATTHEW MEYERHOFER (Cal. Bar No. 268559) 
  [email protected] 
 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
44 Montgomery Street, Suite 2800 
San Francisco, CA 94104  
(415) 705-2500 (Telephone) 
(415) 705-2501 (Facsimile) 

SECURITIES AND EXCHANGE COMMISSION, 
 
  Plaintiff, 
 
 vs. 
 
ABRAHAM SHAFI, 
 

  Defendant, 
 
and 

 
BARBARA WOORTMANN, 
 
   Relief Defendant. 
 

 

 

Case No.  
 
 
COMPLAINT 
 

Plaintiff Securities and Exchange Commission (the “SEC”) alleges: 

SUMMARY OF THE ACTION 

1. From at least March through June of 2021, Abraham Shafi (“Shafi”) engaged in a 

fraudulent scheme to mislead investors and sell about $170 million of preferred stock in Get 

Together, Inc. (more commonly known as “IRL”), a social media platform that he co-founded and 

then led as its Chief Executive Officer until April 2023.  

2.  Shafi described IRL as an app that had attracted 12 million purported users and 

achieved a high rank in the Apple App Store based on viral popularity and organic growth. This 

description misleadingly omitted the significant role that advertising played in Shafi’s growth 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

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strategy for IRL. Since the fall of 2019, Shafi had promoted IRL and boosted its perceived 

popularity by spending millions of dollars on “incent” advertisements—advertisements that 

offered users incentives to download the app. 

3. Moreover, Shafi did not simply fail to disclose IRL’s use of incent advertisements. 

He also made false statements about IRL’s advertising expenditures, providing prospective 

investors with offering materials that significantly understated the amount of money that IRL had 

spent on marketing-related expenses. Shafi also routed payments to IRL’s largest incent 

advertising platform through third parties, in an apparent effort to conceal the true nature of those 

payments. 

4. Shafi’s deception had another dimension as well. He hid from investors that, prior 

to the 2021 offering, he and his then-fiancée, Barbara Woortmann (“Woortmann”), who was never 

employed by IRL, had charged at least hundreds of thousands of dollars in personal expenses to 

IRL business credit cards they possessed. These charges covered items such as clothing, home 

furnishings, travel, and everyday living expenses. Shafi used IRL’s bank account to pay the 

monthly balances on these credit cards. 

5. Investors, unaware that IRL had spent millions of dollars on incent advertisements 

and ignorant of Shafi and Woortmann’s misuse of IRL’s credit cards, purchased a total of about 

$170 million in IRL preferred stock in connection with IRL’s “Series C” private offering. The lead 

investor, “VC1,” a venture capital fund, purchased about $125 million worth of IRL securities 

from IRL and about $7.5 million worth of IRL securities directly from Shafi. Another venture 

capital fund, “VC2,” purchased about $10 million worth of IRL securities from IRL.  

6. After the Series C offering closed, Shafi continued to deceive investors, whose 

representatives held seats on IRL’s Board of Directors. He orchestrated a scheme to continue 

hiding IRL’s large advertising expenditures—including its expenditures on incent ads—by 

directing one of IRL’s vendors to submit invoices that underreported IRL’s advertising-related 

costs. Shafi and Woortmann also continued charging what ultimately amounted to millions of 

dollars in personal expenses to IRL’s business credit cards. Among other things, Shafi used his 

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IRL credit card to pay for hundreds of thousands of dollars of expenses related to his April 2022 

wedding to Woortmann, including wedding guests’ airfare and luxury hotel accommodations. 

7. A Special Committee of IRL’s Board of Directors removed Shafi as IRL’s CEO in 

late April 2023, after discovering Shafi and Woortmann’s practice of charging personal expenses 

to their IRL business credit cards. Shortly afterwards, IRL’s reported user population collapsed. A 

forensic analysis undertaken at the direction of the Special Committee determined that, prior to the 

collapse, a substantial percentage of IRL’s users were likely bots. IRL’s Board of Directors 

subsequently decided to wind down the company. 

8. Shafi violated the antifraud provisions of the federal securities laws. Specifically, 

Shafi violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)] 

and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] 

and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. Woortmann was unjustly enriched by Shafi’s 

violations. 

JURISDICTION AND VENUE 

9. The SEC brings this action pursuant to Sections 20(b), 20(d), and 22(a) of the 

Securities Act [15 U.S.C. §§ 77t(b), 77t(d), and 77v(a)], and Sections 21(d), 21(e), and 27 of the 

Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa]. 

10. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d)(1), 

and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d)(1), and 77v(a)], and Sections 21(d), 

21(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].  

11. Shafi, directly or indirectly, made use of the means and instrumentalities of 

interstate commerce or of the mails in connection with the acts, transactions, practices, and courses 

of business alleged in this complaint. 

12. Venue is proper in this District pursuant to Section 22(a) of the Securities Act [15 

U.S.C. § 77v(a)], and Section 27(a) of the Exchange Act [15 U.S.C. § 78aa(a)]. Acts, transactions, 

practices, and courses of business that form the basis for the violations alleged in this complaint 

occurred in this District. For example, IRL’s principal place of business during all relevant times 

was located in Berkeley, CA. 

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13. Under Civil Local Rule 3-2(d), this civil action should be assigned to the Oakland 

Division because a substantial part of the events or omissions which give rise to the claims alleged 

herein occurred in Alameda County. 

DEFENDANT AND RELIEF DEFENDANT 

14. Defendant Abraham Shafi, age 37, resides in Pepeekeo, Hawaii. He co-founded 

IRL and was its CEO until April 2023. 

15. Relief Defendant Barbara Woortmann, age 35, resides in Pepeekeo, Hawaii. She 

is Shafi’s wife. 

RELATED ENTITY 

16. Get Together, Inc. is a Delaware corporation. During the period relevant to this 

action, its principal place of business was in Berkeley, CA. 

FACTUAL ALLEGATIONS 

A. Shafi Used “Incent” Advertisements to Attract IRL Downloads and Users. 

17. Shafi and his co-founders created the IRL social media app in 2018. They launched 

IRL with the intention of building a social media platform centered on events that people would 

attend together, initially “in real life” and later remotely as well. 

18. In September 2019, Shafi began promoting IRL using “incent” advertisements. An 

incent advertisement is an ad that offers users a reward that is unrelated to the app itself in 

exchange for downloading the advertised app. For example, someone playing a game on their 

phone or computer might be offered extra “lives” or “gems” to use in the game in exchange for 

downloading a second app that is unrelated to the game. Or a potential user might be offered 

“points,” which could be redeemed for gift cards, in exchange for downloading an app. 

19. Incent ads are attractive to some app developers because they can be used to drive a 

large volume of downloads, quickly, at low cost. Traditional online advertising can cost an app 

developer as much as $5 to $7 per download, whereas incent ads can generate downloads at a cost 

of less than $1 each. But because users who download an app via an incent ad are incentivized by a 

reward unrelated to the app, they are less likely to turn into long-term users.  

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20. In September 2019, Shafi began using incent advertising platforms to promote IRL. 

He told representatives of these platforms that his goal was to drive large download volumes and 

thereby achieve a high rank in the Apple App Store. 

21. Between September 2019 and April 2021, Shafi caused IRL to spend about $5.7 

million on incent advertisements. This spending had the desired effect: IRL became an app that 

regularly ranked in the top 20, and sometimes in the top 10, of social media apps in the Apple App 

Store. 

B. Shafi Routed IRL’s Payments To Its Principal Incent Advertising Platform 
Through Intermediaries. 

22. Soon after IRL started using incent advertisements, Shafi asked one of his 

acquaintances, “Individual 1,” to handle IRL’s payments to IRL’s principal incent advertising 

platform (the “Incent Ad Platform”). Every two weeks, the Incent Ad Platform would send an 

invoice for IRL’s incent advertisements to Individual 1. Individual 1 would then ask Shafi to send 

him enough money to pay the invoice, and IRL would transfer money to pay the invoice to an 

entity controlled by Individual 1. That entity would then pay the Incent Ad Platform on IRL’s 

behalf. 

23. In October 2020, Shafi hired a business entity (the “Agency”) owned and managed 

by another one of his acquaintances, “Individual 2,” to assist with IRL’s marketing and advertising 

efforts. The Agency then took over the payment-intermediary role from Individual 1, following the 

same general procedure to pay the Incent Ad Platform’s invoices for IRL. 

C. Shafi and Woortmann Used IRL Credit Cards and Bank Accounts To Pay For 
Personal Expenses. 

24. In 2017, Shafi obtained a business credit card account for “GATHERAPP INC.”, a 

predecessor business to IRL. No later than January 2019, Shafi had obtained a second credit card 

on the same account for Woortmann. Around the beginning of 2020, the business associated with 

the account formally changed from GATHERAPP INC. to Get Together, Inc. Woortmann was 

never an employee or contractor of IRL. 

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25. Beginning no later than January 2019 and continuing until at least September 2022, 

Shafi and Woortmann used these credit cards to pay for millions of dollars in personal expenses. 

These expenses included: purchases from home improvement and home furnishing retailers; 

purchases from clothing and jewelry retailers; airfare; stays at luxury hotels in Hawaii and 

elsewhere; everyday expenses from restaurants, grocery stores, food delivery apps, and rideshare 

apps; and PayPal and Venmo payments that appear to be of a personal nature, including payments 

to Woortmann’s family and friends. 

26. From at least January 2019 until September 2022, Shafi typically paid the monthly 

bills on the IRL business credit cards, which included these millions of dollars in personal 

expenses, using funds from IRL’s bank account. During that three-and-a-half-year period, it 

appears that Shafi made only one payment against the IRL business credit card account balance 

using funds from his own personal bank account: a $150,000 payment in April 2021. 

D. Shafi and IRL Sold About $170 Million Worth of IRL Securities While 
Concealing IRL’s Reliance On Incent Advertisements And Shafi and 
Woortmann’s Use of IRL’s Credit Card Account To Pay For Personal Expenses. 

27. From at least March through June of 2021, IRL solicited VC1, VC2, and other 

entities for investments in IRL. As IRL’s CEO, Shafi had ultimate authority over the offering 

documents that he shared with prospective investors. 

28. During the offering process, Shafi presented IRL as an app that had achieved 

impressive growth organically—meaning from users who did not sign up via a paid 

advertisement—and thereby achieved a high rank in the Apple App Store. He misleadingly 

omitted any reference to incent ads from the materials he shared with investors. He also provided 

investors with documents that significantly underreported IRL’s advertising expenses. 

29. For example, Shafi provided prospective investors with a “Spend Summary” that 

purported to break down IRL’s operating expenses into several categories on a month-by-month 

basis from January 2020 to February 2021. This document reported that IRL’s total PR/marketing 

expenses averaged out to less than $40,000 per month. In reality, from January 2020 to February 

2021, IRL spent, on average, more than $200,000 per month on the Incent Ad Platform alone. In 

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March and April 2021, IRL’s spending on the Incent Ad Platform increased to about $500,000 per 

month. 

30. During a March 16, 2021 text message conversation between Shafi and the 

Managing Partner of VC2, Shafi sent the Managing Partner text messages with excerpts from the 

“Spend Summary.” The Managing Partner remarked that another prospective investor would 

“love” that IRL “spent virtually zero on marketing.” Shafi misleadingly replied, “That’s us! Real 

social.” 

31. On April 19, 2021, Shafi sent VC1 a question-and-answer (“Q&A”) document 

claiming that IRL spent about $50,000 per month on advertising. The same document misleadingly 

attributed IRL’s high rank in the Apple App Store to “organic channels,” without mentioning 

IRL’s use of incent advertisements. Shafi reviewed the Q&A document before he sent it to VC1. 

Shafi shared the Q&A document with other investors as well. 

32. Shafi knew, or was reckless in not knowing, that IRL’s true advertising 

expenditures were much higher than $50,000 per month. Shafi was aware of the true magnitude of 

IRL’s expenditures on the Incent Ad Platform from his communications with Individual 1 and 

from his communications with a representative of that platform. For example, during a December 

1, 2020 chat discussion with a representative of the Incent Ad Platform, Shafi wrote, “I spend 

millions with you. I expect some basic treatment.” In an April 9, 2021 chat discussion, the same 

representative informed Shafi that IRL’s spending on incent advertisements had increased to 

between $15,000 and $17,000 per day. 

33. On April 13, 2021, Shafi sent VC1 a slide presentation. Shafi included information 

in this slide presentation touting that IRL was highly ranked in the Apple App Store. But again, the 

presentation made no mention of the fact that IRL had used incent advertising to achieve this rank. 

Shafi reviewed the slide presentation before sending it to VC1. Shafi shared the slide presentation 

with other investors as well. 

34. Additionally, on or around April 21, 2021, Shafi sent emails to VC1 and other 

investors attributing a surge in downloads of the IRL app that had occurred in the fall of 2019 to 

“seasonality around the holidays.” As Shafi knew, or was reckless in not knowing, these emails 

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were misleading because they omitted that the surge occurred around the same time IRL started 

spending heavily on incent advertising. 

35. IRL investors considered these false and misleading statements to be important to 

their decisions to invest in IRL. Investors viewed IRL’s high app store rank as evidence of the 

app’s popularity and success in acquiring customers. Investors considered the amount of money 

IRL spent on marketing and advertising to be important because, for example, the false lower 

figures presented to investors by Shafi suggested that the app was growing efficiently and could 

eventually become profitable. VC1 considered information about IRL’s user acquisition channels 

to be important because such information was relevant to understanding IRL’s popularity as well 

as its cost structure. 

36. On April 23, 2021, shortly before VC1 provided Shafi with a term sheet outlining a 

potential investment deal, Shafi told a representative of VC1 that IRL had received multiple term 

sheets from other prospective investors valuing IRL at $1 billion. As Shafi knew, or was reckless 

in not knowing, this was false. At that time, IRL had received only one tentative term sheet from a 

prospective investor, and that investor had withdrawn the term sheet a month earlier, on March 23, 

just one day after sending it. 

37. On May 18, 2021, VC1, VC2, and other investors entered into a Preferred Stock 

Purchase Agreement (“PSPA”) with IRL. Shafi signed the PSPA on behalf of IRL.  

38. In the PSPA, Shafi and IRL represented that IRL would use the proceeds from the 

Series C offering “for general corporate and working capital purposes.” As Shafi knew, or was 

reckless in not knowing, this statement was misleading because the PSPA failed to disclose that 

Shafi and Woortmann regularly used IRL’s business credit cards to pay for their personal 

expenses, and used IRL’s funds to pay the monthly credit card bills. As Shafi knew, or was 

reckless in not knowing, this statement was also misleading because the PSPA did not disclose that 

Shafi and Woortmann would continue charging personal expenses to IRL’s business credit cards, 

and that they would use proceeds from the Series C offering to pay the monthly credit card bills. 

39. In the PSPA, Shafi and IRL also represented that “none of [IRL’s] directors, 

officers or employees, or any members of their immediate families . . . are, directly or indirectly, 

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indebted to [IRL].”  As Shafi knew, or was reckless in not knowing, this statement was false and 

misleading because, by charging personal expenses to IRL business credit cards, Shafi and 

Woortmann were incurring at least hundreds of thousands of dollars in liability to IRL for 

misappropriating IRL’s funds. 

40. In the PSPA, Shafi and IRL also represented that there were “no agreements, 

understandings, or proposed transactions (in any case oral or written) between [IRL] and any of its 

officers” other than (i) “standard employee benefits generally made available to all employes . . .,” 

(ii) “standard director and officer indemnification agreements approved by the Board of 

Directors,” (iii) “inventions assignment agreements . . . ,” and (iv) “the purchase of shares . . . and 

the issuance of options . . . in each instance, approved in the written minutes of the Board of 

Directors.” As Shafi knew, or was reckless in not knowing, this statement was misleading because 

it did not disclose Shafi’s practice of charging personal expenses to his IRL business credit card. 

41. Neither Shafi nor IRL disclosed that Shafi and Woortmann had a longstanding 

practice of paying for personal expenses using IRL’s business credit cards and had, by May 2021, 

already charged at least hundreds of thousands of dollars in personal expenses to those credit cards. 

42. Had they known about it, IRL’s investors would have considered information about 

Shafi’s use of an IRL business credit card to pay for personal expenses to be important to their 

investment decisions because such use called into question Shafi’s judgment as a CEO. When a 

Special Committee of IRL’s Board of Directors, which included representatives from VC1 and 

VC2, eventually learned that Shafi and Woortmann had been using their IRL business credit cards 

to pay for personal expenses, the committee removed Shafi as IRL’s CEO.  

43. Pursuant to the May 18, 2021 PSPA, VC1 purchased about $125 million of IRL 

preferred stock directly from IRL, and VC2 purchased about $10 million of IRL preferred stock 

from IRL. In total, IRL sold about $145 million of preferred stock to investors in connection with 

the Series C offering, which had closing dates on May 18, 2021, June 1, 2021, June 14, 2021, and 

June 17, 2021. 

44. At the same time, VC1 also purchased about $25 million of IRL securities from 

existing IRL employees, including about $7.5 million directly from Shafi. 

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45. After the Series C offering closed, Shafi unilaterally raised his own salary from 

about $400,000 to about $1 million per year. He did not inform IRL investors or IRL’s Board of 

Directors about this raise until more than a year later, in October 2022. 

E. After the 2021 Securities Offering, Shafi Continued To Conceal From Investors 
IRL’s Reliance On Incent Advertising By Directing A Scheme To Falsify The 
Company’s Financial Statements. 

46. On May 19, 2021, Shafi hired Individual 2 as IRL’s “Director of Growth.” In this 

role, Individual 2 was responsible for managing IRL’s paid media and growing IRL’s user base. 

Individual 2 also continued to manage the Agency, and the Agency continued to pay IRL’s 

invoices from the Incent Ad Platform. Over time, the Agency came to manage and pay some of 

IRL’s other marketing and advertising vendors as well. 

47. In August 2021, IRL hired its first Chief Financial Officer (“CFO”). In order to 

better track IRL’s expenses and to prepare quarterly financial reports for IRL’s Board of Directors 

(which included representatives from VC1 and VC2), IRL’s CFO asked Individual 2 to create 

monthly invoices describing the services that the Agency was providing to IRL. IRL’s CFO asked 

Individual 2 to create invoices both on a going-forward basis and for the work that the Agency had 

done for IRL in the past. 

48. Shafi directed Individual 2 to create invoices that did not accurately reflect the 

work that the Agency had performed, and was continuing to perform, for IRL. Specifically, Shafi 

directed that on each of the Agency’s monthly invoices, the Agency should allocate 90% of its 

charges to a line item titled “Infra Cost,” regardless of the true nature of the Agency’s work for 

IRL or expenditures on behalf of IRL. Shafi directed that only a small portion of each invoice be 

allocated to a line item called “Growth Cost.” Shafi further directed that the invoices should state, 

“Infra cost relates to Amazon Web Services, SMS, Google Cloud costs.” Individual 2 prepared 

Agency invoices pursuant to Shafi’s directions and provided those invoices to IRL’s CFO. 

49. As Shafi knew, or was reckless in not knowing, these invoices were false and 

misleading. Most of the money that IRL paid the Agency each month—both before and after the 

Series C offering—was used to pay IRL’s marketing and advertising vendors, including the Incent 

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Ad Platform. Relatively little of the money that the Agency paid on IRL’s behalf went to actual 

infrastructure providers like Amazon Web Services or Google Cloud, or to SMS messaging 

services. 

50. IRL’s financial employees and contractors relied on the Agency’s invoices in 

preparing quarterly financial reports for IRL’s Board of Directors. Because the Agency’s invoices 

falsely allocated the majority of the Agency’s charges to “Infra Cost,” those financial reports 

significantly overstated the amount of money IRL was spending on infrastructure expenses and 

significantly understated the amount of money IRL was spending on marketing and advertising 

expenses. 

51. For example, the financial reports prepared for the Board of Directors showed that, 

in 2021, IRL had about $4.2 million in “growth” expenses and about $13.5 million in infrastructure 

expenses. IRL’s true 2021 expenses were the reverse of this: more than $14.2 million in growth 

expenses, and only about $3.4 million in infrastructure expenses. 

F. After the Series C Offering, Shafi and Woortmann Continued To Use IRL’s 
Business Credit Cards To Pay For Personal Expenses. 

52. After the Series C offering closed, Shafi and Woortmann continued to use IRL’s 

business credit cards to pay for millions of dollars in additional personal expenses, including 

clothing and jewelry expenses, travel expenses, everyday living expenses, and home improvement 

and home furnishing expenses. Among other things, Shafi and Woortmann used the IRL credit 

cards to pay for hundreds of thousands of dollars in airfare and luxury hotel expenses for guests at 

their April 2022 wedding. 

53. In late 2021, IRL’s CFO discovered that Shafi and Woortmann had been charging 

what appeared to be personal expenses to IRL’s business credit cards. After the CFO confronted 

Shafi about these expenses, Shafi admitted that he and Woortmann had been charging personal 

expenses to their IRL credit cards. Shafi also agreed to pay back the expenses that he admitted 

were personal in nature. 

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54. But Shafi maintained that some of the expenses the CFO asked about were genuine 

business expenses. The CFO asked Shafi to provide receipts documenting these purported business 

expenses, but Shafi provided the CFO with relatively few such receipts. 

55. After Shafi admitted to the CFO that he and Woortmann had been charging 

personal expenses to their IRL business credit cards, the couple continued to charge additional 

personal expenses to those credit cards. Shafi never did anything to memorialize 

contemporaneously which expenses on his IRL business credit card were business expenses and 

which ones were personal expenses. 

56. Between December 2021 and January 2023, Shafi reimbursed IRL for about $2.5 

million of his and Woortmann’s personal expenses. But Shafi did not reimburse IRL for other 

expenses that, based on available credit card and digital payment platform records, appear to be 

personal in nature. Examples of charges that appear to be personal in nature and not yet reimbursed 

include the following: 

a. Two June 21, 2021 charges on Woortmann’s IRL credit card, of $12,074.92 and 

$4,100.90, at a merchant that appears to provide goods and services related to 

spirituality and alternative medicine;  

b. An October 3, 2021 charge on Shafi’s IRL credit card of $34,714.75, identified on 

the credit card statement as a luxury resort hotel on the island of Hawaii;  

c. A December 23, 2021 charge on Woortmann’s IRL credit card of $21,712.25, 

identified on the credit card statement as a luxury resort hotel on the island of 

Hawaii; and 

d. A May 15, 2022 charge on Shafi’s IRL credit card of $4,367.88, identified on the 

credit card statement as a luxury resort hotel on the island of Lanai. 

G. A Special Committee of IRL’s Board of Directors Removed Shafi As CEO And 
Determined That a Substantial Percentage Of IRL’s Users Were Likely Bots. 

57. IRL’s Board of Directors did not learn about Shafi and Woortmann’s use of IRL 

credit cards for personal expenses until April 2023. At that point, a Special Committee of IRL’s 

Board of Directors removed Shafi as IRL’s CEO. 

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58. Shortly after the Special Committee removed Shafi from the CEO role, IRL’s 

purported number of users plummeted. A forensic analysis undertaken at the direction of the 

Special Committee determined that, prior to the collapse, a substantial percentage of IRL’s users 

were likely bots. More specifically, the analysis determined that 95% of users for which detailed 

usage data were available were likely bots, and that the accounts for which such data were not 

available were also unlikely to be representative of human activity. 

FIRST CLAIM FOR RELIEF (Shafi Only) 

Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder 

59. The SEC re-alleges and incorporates by reference Paragraph Nos. 1 through 58. 

60. Shafi, by engaging in the conduct described above, directly or indirectly, in 

connection with the purchase or sale of securities, by use of means or instrumentalities of interstate 

commerce, or of the mails, with scienter: 

a. Employed devices, schemes, or artifices to defraud; 

b. Made untrue statements of material facts or omitted to state material facts 

necessary in order to make the statements made, in the light of the 

circumstances under which they were made, not misleading; and 

c. Engaged in acts, practices, or courses of business which operated or would 

operate as a fraud or deceit upon other persons, including purchasers of 

securities. 

61. By reason of the foregoing, Shafi violated, and unless restrained and enjoined will 

continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 

thereunder [17 C.F.R. § 240.10b-5]. 

SECOND CLAIM FOR RELIEF (Shafi Only) 

Violations of Section 17(a) of the Securities Act 

62. The SEC re-alleges and incorporates by reference Paragraph Nos. 1 through 58. 

63. Shafi, by engaging in the conduct described above, directly or indirectly, in the 

offer or sale of securities, by use of the means or instruments of transportation or communication 

in interstate commerce or by use of the mails:  

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a. with scienter, employed devices, schemes, or artifices to defraud;  

b. obtained money or property by means of untrue statements of material fact 

or by omitting to state a material fact necessary in order to make the 

statements made, in light of the circumstances under which they were 

made, not misleading; and  

c. engaged in transactions, practices, or courses of business which operated or 

would operate as a fraud or deceit upon purchasers.  

64. By reason of the foregoing, Shafi violated, and unless restrained and enjoined will 

continue to violate, Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]. 

THIRD CLAIM FOR RELIEF (Woortmann Only) 

Relief Defendant – Unjust Enrichment 

65. The SEC re-alleges and incorporates by reference Paragraphs 1 through 58. 

66. Woortmann, through her use of an IRL business credit card to pay for personal 

expenses, has been unjustly enriched under circumstances in which it is not just, equitable, or 

conscionable for her to retain such funds. 

PRAYER FOR RELIEF 

WHEREFORE, the SEC respectfully requests that the Court: 

I. 

Permanently enjoin Shafi from violating, directly or indirectly, Section 10(b) of the 

Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 [17 C.F.R. § 240.10b-5] thereunder, and 

Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]. 

II. 

Permanently enjoin Shafi from directly or indirectly, including, but not limited to, through 

any entity owned or controlled by him, participating in the issuance, purchase, offer, or sale of any 

securities, provided however, that such injunction shall not prevent Shafi from purchasing or 

selling securities for his own personal accounts. 

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III. 

Permanently bar Shafi from serving as an officer or director of any issuer having a class of 

securities registered with the SEC pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l] or 

that is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)], 

pursuant to Section 20(e) of the Securities Act [15 U.S.C. § 77t(e)] and Section 21(d)(2) of the 

Exchange Act [15 U.S.C. § 78u(d)(2)]. 

IV. 

Order Shafi to disgorge all ill-gotten gains received as a result of his unlawful conduct plus 

prejudgment interest thereon pursuant to Sections 21(d)(3), 21(d)(5), and 21(d)(7) of the Exchange 

Act [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)]. 

V. 

Order Shafi to pay a civil monetary penalty pursuant to Section 20(d) of the Securities Act 

[15 U.S.C. § 77t(d)], and Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)]. 

VI. 

 Order Woortmann to disgorge the ill-gotten gains or unjust enrichment she obtained or 

derived from Shafi’s unlawful conduct, together with prejudgment interest on all such amounts. 

VII. 

Retain jurisdiction of this action in accordance with the principles of equity and the Federal 

Rules of Civil Procedure in order to implement and carry out the terms of all orders and decrees 

that may be entered, or to entertain any suitable application or motion for additional relief within 

the jurisdiction of this Court. 

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VIII. 

Grant such other and further relief as this Court may determine to be just, equitable, and 

necessary. 
 
Dated:  July 31, 2024    Respectfully submitted, 
 

  /s/ Matthew Meyerhofer                            
Matthew Meyerhofer 
Attorney for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 

 

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