2 days Ago By Apurwa Amit
Charlie Javice, who is the founder of student-finance company Frank, was found guilty of cheating JPMorgan Chase & Co out of money when her firm was sold to the bank for $175 million in 2021. According to the New York Post, a Manhattan federal jury in the US reached the verdict following a six-week trial, having deliberated for only six hours. According to a report by the New York Post, Javice, aged 32, was convicted on several counts, including bank fraud, after prosecutors were able to prove that she made up data to artificially inflate Frank's user base from approximately 300,000 to a claimed 4.
25 million users. Prosecutors said, "the deception, prosecutors said, was critical to securing JPMorgan's purchase of the startup in 2021," as reported. According to the New York Post, Javice appeared visibly shaken and sat silently as the verdict was read.
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. 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 marks a dramatic fall for Javice, who was once celebrated as a rising star in fintech after launching Frank in 2016. The startup aimed 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.
Frank's student-friendly tools and aggressive growth drew national attention, including from JPMorgan Chase. How Charlie Javice was caught? The fraud reportedly unraveled in late 2022 when JPMorgan sued Javice. The bank alleged that 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. This led to Javice's arrest in April 2023 and release on a $2 million bond.
Despite pleading not guilty, prosecutors presented witnesses, emails, and internal documents. These depicted a calculated scheme of intentional misconduct to mislead investors and secure the lucrative deal through deceit, the report highlights..
