
She built a popular fintech start-up—Then defrauded JPMorgan of $175M
What's the story
Charlie Javice, the founder of financial aid start-up Frank, has been convicted of defrauding JPMorgan Chase.
A Manhattan federal court jury reached the verdict on Friday after a five-week trial.
Along with her co-defendant Olivier Amar, she now faces decades in prison for conspiracy, bank fraud, and wire fraud. Amar served as Frank's chief growth and acquisition officer.
The sentencing is set for July 23.
Startup journey
Frank's mission to simplify student financial aid
Javice, now 32, launched Frank in her mid-20s, hoping to simplify the Free Application for Federal Student Aid (FAFSA) process.
The start-up was pitched as a way for students to access financial aid more quickly, for a small fee.
The innovation earned Javice a place on Forbes's 30 Under 30 list and caught JPMorgan's attention.
In 2021, the multinational financial services firm acquired Javice for $175 million.
Acquisition fallout
JPMorgan's acquisition and subsequent discovery
JPMorgan had acquired Frank believing it had access to a huge base of young clients.
The bank, however, soon learned that instead of the claimed four million users—and an estimated 10 million by year's end—the actual number was only about 300,000.
The customer list provided by Frank was mostly fake.
Fraud allegations
Prosecutors' claims and evidence presented in court
Prosecutors argued that Javice and Amar knowingly misled JPMorgan to secure the multimillion-dollar deal.
"While Javice and Amar may have thought that they could lie and cheat their way to a huge payday, their lies caught up with them, and they now stand convicted by a jury of their peers," said Acting Manhattan US attorney Matthew Podolsky.
Evidence showed that when Frank's chief software engineer refused to create fake customer names, Javice paid a friend $18,000 to do it instead.
Legal proceedings
Defense's argument and upcoming sentencing
Javice's lawyer Jose Baez argued that JPMorgan knew what it was buying when it purchased Frank.
He alleged that the bank fabricated fraud allegations due to "buyer's remorse" after regulatory changes reduced the data's worth for bringing in new customers.
Javice and Amar were found guilty on all four charges in their indictments, including conspiracy, bank fraud, and wire fraud. Each charge carries a maximum prison sentence of 30 years.