Charlie Javice, the founder of the student financial aid startup Frank, has been sentenced to seven years in prison for orchestrating a massive fraud against JPMorgan Chase. The sentencing follows the bank's ill-fated $175 million acquisition of Frank, a deal that collapsed when the bank discovered the company’s claimed user base was largely fabricated.
Javice received the sentence from a federal judge after a jury in March found her guilty on multiple counts, including securities fraud, wire fraud, bank fraud, and conspiracy.
The heart of the scheme centered on fraudulently inflating the number of Frank's users to secure the lucrative buyout. In 2021, Javice sold her fintech to JPMorgan Chase, falsely assuring the bank that the platform had 4.25 million customers—a number vastly inflated from the actual figure of around 300,000.
Acting Manhattan U.S. Attorney Matthew Podolsky condemned the actions, stating that Javice committed "a brazen scheme to defraud" JPMorgan and "fabricated data to support those lies — all in order to make over $45 million from the sale of her company."
In addition to the prison term, the court ordered Javice to pay significant financial penalties:
· Restitution: Javice must pay $288 million in restitution to JPMorgan Chase.
· Forfeiture: She must forfeit another $22 million earned from the deal.
During the court proceedings, Javice offered an apology to her parents, her boyfriend, and the "shareholders of JPMorgan," while maintaining that "at my core I still believe I'm a good person," according to reports from the Financial Times.
Javice has been permitted to remain free on bail while she pursues an appeal of her conviction and sentence.
See What’s Next in Tech With the Fast Forward Newsletter
Tweets From @varindiamag
Nothing to see here - yet
When they Tweet, their Tweets will show up here.
