Javice found guilty of defrauding JPMorgan in $175M startup purchase

Charlie Javice, the creator of the student loan application startup Frank, which was acquired by JPMorgan for $175 million, was convicted on Friday of deceiving the bank by significantly exaggerating the number of customers.

Following a five-week trial, the jury found Javice guilty, supporting the prosecution’s argument that she falsified most of Frank’s customer list to trick JPMorgan into buying her company.

When JPMorgan purchased Frank in 2021, they believed the startup had 4 million customers. However, it was later discovered that the actual customer count was only 300,000, as evidenced by the high bounce rate of test marketing emails sent to supposed Frank users.

Javice reportedly enlisted the help of a mathematics professor to fabricate customer data, which she presented to JPMorgan during the acquisition process.

In her defense, Javice’s legal team argued that the lawsuit stemmed from regrets on the part of the buyer due to changes in government regulations regarding financial aid forms. Javice pleaded not guilty and did not testify during the trial.

At 32 years old, Javice faces the possibility of a lengthy prison sentence. Her sentencing is scheduled for August, as reported by CNBC.

Javice established Frank in 2017 in her mid-20s and was recognized in the Forbes 30 Under 30 list in 2019.