Thousands of College Kids Paid to Work for a Viral Party Kingpin. What Could Go Wrong?

For eight years, a digital media company called I’m Shmacked has posted viral videos of the college party scene. Beer bongs, booze, marijuana and scantily clad women are all featured prominently, in scenes set to upbeat party music. Cinematic shots of college campuses and university landmarks are interspersed with flip cup games and keg stands.

High schoolers love it. While university tours and campus promo reels can give them an idea of the academic environment at a college, I’m Shmacked gives them an inside look at what really matters, in a social sense: the parties.

“I used to look at the I’m Shmacked party videos of the colleges I was looking at,” said Darius Myers, 24, who was a student at Snow College in Utah. “The schools that had the coolest recap videos, it made me really want to go there.”

The business model of I’m Shmacked is to recruit undergraduates as content creators, often with promises of thousands of dollars a month in compensation and online fame.

By simply posting videos of parties and other viral antics, many were told, they could gain experience in online marketing and make cash from ads and by selling custom merchandise.

Instead, many students sank hundreds of dollars into I’m Shmacked and ran Instagram accounts without pay.

In interviews with The New York Times, students said that after they confronted the company over false promises, they were threatened with lawsuits and intimidated into silence. Many who interned for the company fared no better.

I’m Shmacked was founded in 2011 by Jeffrie Ray, an amateur filmmaker, then 19, and Arya Toufanian, a student at George Washington University, then 20. The two began traveling across the country, filming college parties and uploading the footage to YouTube.

The videos were a hit and often incriminating. One, filmed at West Virginia University, featured students smashing car windows interspersed with footage of them guzzling beer bongs during a St. Patrick’s Day charity party.

In 2012, it had more than half a million views. (It has since been removed from the web; the original YouTube channel for I’m Shmacked has been deactivated for violating terms, but there is a new one.)

In order to keep up with demand, Mr. Ray and Mr. Toufanian started enlisting small groups of people to travel to different colleges, hosting wild parties for the sole purpose of content creation.

This was one of the first widespread digital efforts to capture booze-soaked party culture and package it for the web.

I’m Shmacked, along with companies like Barstool and Total Frat Move, grew by churning out content that sold a fantasy of what college life could be like, racking up followers and view counts by the millions.

For many students, being affiliated with I’m Shmacked was a status indicator. “I thought getting the company name out there with my name would be a good networking opportunity for other things down the line in my life,” said Jerry Shukes, 21, who ran an I’m Shmacked Instagram account at East Carolina University, in North Carolina.

After all, it was an I’m Shmacked YouTube video of a party at East Carolina that influenced his decision to attend that school.

In the fall of 2018, Mr. Shukes paid $300 to I’m Shmacked, thinking it would be “a decent investment” and became part of what Mr. Toufanian called his “college ambassador program.”

That program, which officially started in 2016, was pitched to students simply: pay $45 to $500 and become the designated representative of the company at your school.

The designation meant running an I’m Shmacked Instagram account that was school specific — @imshmackedpurdue, say, or @imshmackedcornell — and if a post or video went viral, it would often be reposted to the main I’m Shmacked handle, which had 1.2 million followers. Students were told they could make money through online merchandise stores, ad placements and by charging other students to be featured on the accounts.

According to a company spreadsheet from 2017 and interviews with several people who used to work with Mr. Toufanian, at least 3,600 college kids took the company up on this offer. (Mr. Toufanian did not respond to an email sent requesting comments for this article. Mr. Ray, who left the company by 2016, could not be reached.)

There were some red flags. In 2013, after I’m Shmacked sold hundreds of tickets to University of Delaware students for a party it failed to reserve a site for, police had to be called in to quell the disturbance.

In 2016, students at Santa Clara University demanded refunds from the company after it raised more than $30,000 for a concert and party that never took place. In 2017, I’m Shmacked canceled a Halloween party in Utah the night before it was set to take place, leaving the events company it had teamed with on the hook for thousands of dollars.

Mr. Toufanian had also proved to be a loose cannon. In 2014 he threatened a Business Insider reporter with petitions to fire and deport her, and tweeted that she should be “prepping her anus” for an attack.

Many of the I’m Shmacked Instagram accounts grew quickly, and students were excited to be working with what they considered a mainstream brand. Some planned to add their ambassadorships to their résumés.

“I thought the page was going to be something,” said Jorge Flores, a 20-year-old at the University of Kansas, who paid $300 to become an I’m Shmacked ambassador. “I thought it would be a good way to build a community at school.”

“I’m Shmacked did tours on YouTube,” he said, referring to the company’s tendency to sweep through college towns like a rock band. “So I was like, maybe they’d bring the tour to K.U. or expose me to other opportunities and help me make connections.”

But over time, many students began to feel they were being used.

Mr. Shukes, the brand ambassador for East Carolina, eventually concluded he would never recoup the money he paid to the company. “I was scammed,” he said.

Many students who signed up did notice the company’s disorganization from the start. It quickly became clear that some schools had multiple I’m Shmacked ambassadors and Instagram accounts.

Penn State, for instance, had four I’m Shmacked pages. In interviews, several students said that Mr. Toufanian promised them that competing accounts were frauds, and that he would have Instagram remove them.

In reality, multiple Instagram accounts meant that students could be pitted against their peers to source the most viral content.

Mr. Toufanian had also told students that they would receive a cut of any items sold through college-specific merchandise shops that they could promote on their Instagram accounts; this, many believed, would allow them to quickly recoup the money they had given I’m Shmacked up front.

But online storefronts were rarely created, according to someone who consulted with Mr. Toufanian on business matters, and student ambassadors never received a cut of any sales.

“I worked at a sub shop on campus for $9.25 an hour. I was just expecting to make the money I gave them back in a month or so,” said Arun Singh, a 22-year-old who paid I’m Shmacked to become an ambassador at Penn State in September 2018. “But none of that happened.”

In many cases, students said, once they paid the fee, they stopped hearing from the company. When Mr. Shukes tried to speak out about what happened to him, Mr. Toufanian sent him repeated messages on Instagram and an email.

One reads: “You’ll be sued personally and I’m listing your individual name if your website isn’t down in 24 hours. I will pursue you for damages. It is beyond illegal.”

When another person set up an Instagram account on which he reposted screen shots from students who said they had been taken advantage of, Mr. Toufanian messaged him that he would soon be sued. “It’s criminal and slander,” the message said. “Reporting harassment to police they’ll deal with you.”

There are no records of lawsuits filed by Mr. Toufanian against students, but many reported being bullied by him and said they feared retribution. And he has a history of threatening legal action against those who cross him.

In 2016, Mr. Toufanian hired a lawyer to send a letter to Gawker Media demanding that it take down two negative articles about him, calling them libelous. (The same lawyer represented Peter Thiel in his legal attacks against Gawker.)

In December 2018, after the website 5orry published an article that was suspicious of another of Mr. Toufanian’s ventures — a stock trading scheme, operating under the Instagram handle @stocks — 5orry’s owner received many emails from Mr. Toufanian threatening legal action if the articles were not removed.

“After today I will pursue a lawsuit against you with cooperation of police,” Mr. Toufanian wrote in an email in April. “You don’t want to give me your name, your internet service provider and the host will tell me who paid for it when I sue them and press criminal charges. You can’t hide forever. Last chance.”

More recently, Mr. Toufanian filed a lawsuit against Kyle Oreffice, a stock trader, for defamation after Mr. Oreffice published an article on his website calling Mr. Toufanian a “scammer” and “The Douche of Wall Street.” (Mr. Toufanian also contacted Mr. Oreffice’s mother, she said, and posted her full name to his Instagram Stories.)

Mr. Toufanian has also had legal trouble come the other way. According to court records, he was sued in 2015 for breach of contract and in 2014 for transferring $120,000 from I’m Shmacked into his personal bank account, among other claims.

In 2018, Madison Louch, a D.J. and Instagram influencer with whom Mr. Toufanian had a personal relationship, filed a restraining order against him.

From 2016 to 2018, Mr. Toufanian ran his company from a pair of rental houses in Los Angeles with a rotating cast of associates, many of whom were working without contracts or job titles.

I’m Shmacked interns lived in these houses. According to interviews with former roommates and business associates of Mr. Toufanian, these interns would spend hours messaging college students, trying to get them to pay hundreds of dollars to join the “ambassador” program.

Almost all communication with college kids was done via the primary I’m Shmacked Instagram handle, which was verified. (Often, so many messages were sent each hour that the handle would be banned from sending new messages for chunks of time as part of Instagram’s anti-spam protections.)

While they were recruiting others, several former interns said that they were also being promised payments that never materialized. Some were told that they would have to work for the first month for free to prove themselves, but after that, they would receive commissions.

Some were promised bonuses if they performed well. When people quit or ran out of money, Mr. Toufanian scouted new workers by posting job listings to Instagram Stories.

A copy of an intern contract from 2017 included the phrase: “Intern is expected to promote and grow the Company’s respective accounts through diligent frequent posts and engagement with their market.”

Some students who believe they will never recoup their money are still running I’m Shmacked accounts. Not long after Bradley Gasparovich, the 21-year-old administrator of @ImShmacked_MSU (Michigan State University), paid Mr. Toufanian $300 to be a college ambassador, Mr. Toufanian unfollowed him and blocked all communication.

Mr. Gasparovich was frustrated, feeling he had been taken advantage of, but decided to keep the handle active. He is interested in marketing and had amassed more than 7,000 followers, so now he is just posting for fun. “I keep it because everyone knows the name,” he said.

He also uses the account to warn other students. In September, after I’m Shmacked put out a new call for college ambassadors on Instagram Stories, Mr. Gasparovich got messages from students who wanted to know how much money he was making, before they signed up for the program themselves.

“Arya told them they will generate revenue right away,” Mr. Gasparovich said. “I said no! I did this last year, just don’t do it.”

Dakota Verrico, an 18-year-old freshman at Rutgers, in New Jersey, almost fell for it. After Mr. Verrico responded to the call-out, he was told that in order to learn more about the “business opportunity,” he would have to pay $500.

Mr. Toufanian told him that he could “make up to $10,000 to $30,000 a month,” Mr. Verrico said. “I kept asking him, how would I make money from this? How does this work?” (Mr. Verrico said that Mr. Toufanian ultimately left him a voice memo that explained that money was made through charging women to be featured on the I’m Shmacked Instagram accounts in addition to other methods.)

In early October, the primary I’m Shmacked verified Instagram handle disappeared. Instagram confirmed that the account was removed for multiple violations. Mr. Toufanian was distraught.

“I have been desperate for 3 weeks now for our future. Our verified business Instagram @imshmacked was taken down,” he tweeted at the C.E.O. of Instagram. (The tweet has since been deleted.)

Students who lost money to I’m Shmacked were relieved. But a new account could always pop up. Mr. Toufanian’s personal Instagram account, which is verified with almost 175,000 followers, is still active.

Mr. Verrico said he would urge all students to research any companies approaching them on Instagram, especially if the offer seems too good to be true. Still, he understood how someone falls prey to it.

“They see a guy with one million followers and is verified,” Mr. Verrico said. “That’s how I was at first. I was like, ‘Whoa.’ You just never would think someone with that much power would do that.”

Sheelagh McNeill contributed research.

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