SoftBank once invested in social app IRL at a $1.1 billion valuation. Now, the Japanese investment firm is suing the defunct company for fraud, alleging $150 million in damages.

IRL was supposedly poised to become an event organizing alternative for Gen Z, who are using Facebook less and less. Its self-reported numbers were impressive enough to solicit a $170 million Series C from SoftBank, but earlier this summer, an internal investigation by IRL’s board of directors found that 95% of the apps users were fake.

In its legal complaint, SoftBank explains that it was moved to invest in IRL because of its impressive user numbers; the app claimed it had been downloaded by 25% of U.S. teens under 28 years old and was growing at a 400% year-over-year rate. But per the IRL board’s investigation, none of these figures were accurate.

Investors don’t always do their due diligence, but SoftBank claims it wouldn’t have been possible to verify IRL’s fake user numbers, since it had “prepared for SoftBank’s due diligence and structured IRL’s business so that SoftBank could not discover evidence of their fraud.” SoftBank explains in detail its attempts at conducting due diligence before forking over a nine-figure sum.

Per SoftBank’s claims, IRL was spending tens of thousands of dollars on proxy services to fraudulently inflate IRL’s user data with bots. SoftBank also accused IRL of paying hundreds of thousands of dollars per month to a secret firm operated by IRL’s head of Growth to cover up this scheme.

“Because IRL did not have any profitable revenue stream, its value to an outside investor like SoftBank depended on its active user metrics as a source of potential future income,” SoftBank’s complaint reads. “Thus, SoftBank relied on the accuracy of representations from IRL’s executives concerning both the quantity and quality of IRL’s users.”

Reached via text, IRL CEO Abraham Shafi did not respond to TechCrunch’s request for comment. Shafi is named as a defendant in the complaint, as are five of his siblings and cousins, who SoftBank alleges were part of this cover-up. Each of these family members sold IRL common stock to SoftBank in connection with these investments.

When SoftBank accessed a third-party report on IRL’s total users and downloads, the data said that by spring 2021, IRL had only been downloaded 9 million times. Shafi, on the other hand, was claiming that the app had 12 million monthly active users, and that 2 million events got planned each day on IRL. Shafi explained away this discrepancy by saying that the number accounted neither for web sessions, nor underage users, whose data could not be shared.

“In reality, the platform was a virtual ghost town, filled with bots deceptively mimicking active human users,” SoftBank wrote.

In addition to this lawsuit, IRL is being probed by the SEC to determine whether the app violated security laws by misleading investors.