Charlie Javice found guilty of defrauding JPMorgan chase in $175 million fraud case
Once a rising star in fintech, Charlie Javice now faces up to 30 years in prison after being found guilty of defrauding JPMorgan with fake user data.
In a significant legal development, Charlie Javice, founder of the student financial aid startup Frank, has been convicted of defrauding JPMorgan Chase out of $175 million. A federal jury in Manhattan found Javice guilty on multiple counts, including securities fraud, wire fraud, bank fraud, and conspiracy.
Charlie Javice's fraud scheme: How fake users led JPMorgan to a $175M deal gone wrong
Prosecutors revealed that Javice and her co-defendant, Olivier Amar, Frank's chief growth officer, inflated the company's user base from approximately 300,000 to over 4 million to entice JPMorgan into acquiring the startup. This misrepresentation led JPMorgan to purchase Frank in 2021, aiming to access a vast pool of student clients for marketing financial products.
During the trial, evidence showed that Javice paid a data science professor $18,000 to fabricate a list of fake student accounts, further deceiving JPMorgan about Frank's actual scale. This fraudulent activity was uncovered when the bank attempted to contact the purported customer base, resulting in a high rate of undeliverable emails.
From Forbes 30 under 30 to fraud Conviction: Charlie Javice faces up to 30 years in prison
The conviction marks a dramatic fall from grace for Javice, who was once celebrated as a promising entrepreneur and featured in Forbes' 30 Under 30 list. Sentencing is scheduled for July 26, with Javice facing up to 30 years in prison on the most severe charges.
This case underscores the importance of thorough due diligence in corporate acquisitions and serves as a cautionary tale about the potential consequences of fraudulent misrepresentation in the business world.