OAKLAND, Calif. — Attorneys for IRL co-founder and former CEO Abraham Shafi have asked a federal judge to dismiss the government’s fraud indictment, arguing federal prosecutors ignored repeated warnings that a former attorney for the company had an irreconcilable conflict of interest after joining the same U.S. Attorney’s Office that ultimately prosecuted him. The defense contends the alleged conflict undermined the integrity of the charging decision and deprived Shafi of the impartial prosecution required under the Constitution.
In a motion filed July 20 in the U.S. District Court for the Northern District of California, Shafi’s attorneys argue the indictment should be dismissed without prejudice because an attorney identified in court filings only as “Attorney-1” first represented IRL and its Special Committee during internal and government investigations, then urged federal regulators to pursue Shafi rather than the company, before later becoming chief of the Corporate and Securities Fraud Section in the same U.S. Attorney’s Office that investigated and indicted him.
According to the motion, Attorney-1 represented IRL, a social media startup, after the Securities and Exchange Commission began investigating the company in 2022. The defense alleges that after independent consultants questioned allegations that IRL’s user base consisted largely of automated “bots,” Attorney-1 nevertheless advanced that theory on behalf of the company’s Special Committee and later urged regulators to focus enforcement efforts on Shafi while recommending the company itself avoid prosecution.
The motion states that Attorney-1 joined the U.S. Attorney’s Office in December 2023 as chief of the Corporate and Securities Fraud Section, the same section conducting the criminal investigation into Shafi. The defense argues prosecutors could not independently evaluate evidence developed by their new supervisor after she had already advocated for charges against Shafi while in private practice.
Defense attorneys further contend Attorney-1 was directly involved in events underlying two criminal counts in the indictment. They allege Attorney-1 helped draft at least one statement later charged as wire fraud in Count Six and personally supervised the preservation and collection of cellphone data that became central to the obstruction allegation in Count Eight. As a result, the defense argues Attorney-1 is not merely a conflicted former supervisor but also a necessary fact witness whose testimony will be required at trial.
The motion also argues the current indictment reflects what the defense describes as a “fallback” prosecution after the government’s original theory concerning alleged bot activity collapsed. According to the filing, independent consultants retained during IRL’s internal investigation concluded the evidence did not support claims that most of the platform’s users were bots, and prosecutors ultimately omitted those allegations from the indictment in favor of fraud and obstruction charges.
Shafi’s attorneys argue they attempted to address the conflict long before criminal charges were filed. According to the motion, defense counsel wrote to the U.S. Attorney’s Office in May 2024 requesting that the entire office recuse itself because Attorney-1’s leadership position created both an actual conflict and the appearance of partiality.
The U.S. Attorney’s Office declined that request. According to the motion, prosecutors responded in August 2024 that Attorney-1 had been recused from the matter, that supervision had been shifted to the Justice Department’s Fraud Section in Washington, D.C., and that additional safeguards had been implemented. The defense argues those measures were insufficient because Attorney-1 had already influenced the investigation and remained a likely witness in the case.
To support its request for dismissal, the defense relies heavily on United States v. Minkkinen, a 2023 federal decision holding that screening procedures may be inadequate when a former office leader is also a necessary witness. The motion argues that because Attorney-1 possesses firsthand knowledge of evidence underlying the charged offenses, ethical screens cannot eliminate the appearance of partiality or protect the integrity of the proceedings.
The filing also cites Department of Justice policy stating that a U.S. Attorney’s Office should consider recusal when a conflict of interest or appearance of lost impartiality exists. According to the defense, the Northern District of California should have transferred the investigation to another U.S. Attorney’s Office before any charging decision was made.
In concluding the motion, Shafi’s attorneys invoke former U.S. Attorney General Robert H. Jackson’s warning that “the most dangerous power of the prosecutor” is choosing people to prosecute rather than selecting cases based on the evidence. They argue the indictment reflects precisely that concern and ask the court to dismiss the case without prejudice so an unconflicted prosecutor’s office can independently determine whether the prosecution should proceed.
A hearing on the motion is scheduled for Sept. 4 before U.S. District Judge Yvonne Gonzalez Rogers in Oakland.
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