Frank founder Charlie Javice was convicted Friday of defrauding JPMorgan Chase out of $175 million by exaggerating the size of her customer base. The 32-year-old Ivy League graduate, who founded Frank in 2017, claimed to have helped over 5 million students with financial aid.
However, a jury found that Javice had lied about having over 4 million customers and promised to have 10 million by year’s end. In reality, there were only around 300,000 customers.
Javice’s conviction stems from allegations that she fabricated customer numbers to deceive JPMorgan during the acquisition process in 2021. The bank claimed it found evidence of fake data created to support her claims.
Prosecutors argued that Javice paid a college friend $18,000 to generate fake names and pedigree information, which was then sent to a third-party data provider. However, the data provider failed to verify the authenticity of the data.
Javice’s defense team claimed that JPMorgan knew what it was getting in the deal and made up the allegations due to buyer’s remorse after government regulatory changes. The judge set aside the verdict for arguments on sufficiency of evidence and scheduled sentencing for July 23.
This conviction highlights the case of young tech executives who rose to fame with supposedly disruptive companies, only to face scrutiny over puffery and fraud allegations. Javice’s case is among several high-profile examples of entrepreneurs facing challenges in maintaining their credibility amidst financial deals.
Source: https://www.cbsnews.com/news/jpmorgan-charlie-javice-frank-founder-convicted-fraud-175-million