Charlie Javice, the founder of student-finance startup Frank, was reportedly convicted of defrauding America’s largest bank — JPMorgan Chase & Co — in connection with the bank’s $175 million acquisition of her company in 2021. The New York Post reports that a Manhattan federal jury in the US delivered the verdict after a six-week trial, concluding with just six hours of deliberation. A report in the New York Post states that Javice, 32, was found guilty on multiple counts, including bank fraud, following prosecutors’ successful argument that she fabricated data to falsely inflate Frank’s user base from around 300,000 to a claimed 4.25 million users.
JPMorgan bought the Fintech startup in 2021
“The deception, prosecutors said, was critical to securing JPMorgan’s purchase of the startup in 2021,” the report notes. According to the New York Post, Javice appeared visibly shaken and sat silently as the verdict was read, while her co-defendant Olivier Amar, also found guilty, looked down and shook his head, with stunned friends and family in the courtroom. Sentencing is scheduled for a later date, and although Javice faces up to 30 years in prison on the most serious charge, the New York Post cites legal experts suggesting a significantly shorter sentence is likely.
The verdict is reported to be a dramatic fall for Javice, once celebrated as a fintech rising star after launching Frank in 2016 to simplify the college financial aid process through the Free Application for Federal Student Aid (FAFSA). Her innovative approach earned her a spot on Forbes’ “30 Under 30” list in 2019, and Frank’s student-friendly tools and aggressive growth drew national attention, including from JPMorgan Chase.
How the Charlie Javice fraud was caught in 2022
However, the fraud reportedly unraveled in late 2022 when JPMorgan sued Javice, alleging she and Amar misrepresented the company’s metrics by hiring a data science company to generate a fake user list during due diligence. Prosecutors claimed a calculated scheme to mislead investors and secure a lucrative deal through deceit.
The Department of Justice (DoJ) later filed criminal charges, including wire fraud, securities fraud, and conspiracy, leading to Javice’s arrest in April 2023 and release on a $2 million bond. Despite pleading not guilty, the report highlights that prosecutors presented witnesses, emails, and internal documents depicting a calculated scheme of intentional misconduct to mislead investors and secure the lucrative deal through deceit.