Charlie Javice Found Guilty of Defrauding JPMorgan Chase of $175 Million

In a high-profile case, Charlie Javice, the founder of student loan application startup Frank, has been found guilty of defrauding JPMorgan Chase of $175 million. The verdict came after a five-week trial, where prosecutors presented evidence that Javice fabricated the majority of Frank’s customer list to deceive JPMorgan into acquiring her startup.

According to reports, JPMorgan had acquired Frank in 2021, believing the startup had 4 million customers. However, the bank later discovered that the actual customer count was only 300,000. This discrepancy was revealed when JPMorgan sent test marketing emails to alleged Frank users, and approximately 70% of those messages bounced back.

Prosecutors alleged that Javice engaged in a deliberate scheme to inflate Frank’s customer base, making it appear more attractive to potential buyers. They presented evidence that Javice hired a math professor to create fake customer data, which she submitted to JPMorgan during the acquisition process.

Javice’s defense team argued that the lawsuit was a result of buyer’s remorse due to a government change in the way financial aid forms are filled out. However, the jury rejected this argument, finding Javice guilty of wire fraud and other charges.

As a result of the guilty verdict, Javice could face up to 30 years in prison. Sentencing is expected to take place in August. This case highlights the importance of transparency and due diligence in corporate mergers and acquisitions, and serves as a reminder of the severe consequences of fraudulent activities.

The verdict is also a significant blow to Javice’s reputation, who was once hailed as a rising star in the fintech industry. The case serves as a cautionary tale for entrepreneurs and executives, emphasizing the importance of honesty and integrity in business dealings.

In a statement, JPMorgan Chase said it was “pleased” with the verdict and would continue to work to recover the losses incurred as a result of Javice’s fraudulent activities. The bank has already taken steps to rectify the situation, including revising its acquisition processes to prevent similar incidents in the future.