Charlie Javice Convicted In JPM Fraud Case

The millennial who duped JPMorgan Chase into purchasing a now-defunct student finance startup—whose customer database was mostly fake—was found guilty of bank fraud by a Manhattan federal court jury on Friday and faces decades in prison.

The startup, 'Frank,’ was founded by former CEO Charlie Javice in 2016. It offered software to help young millennials obtain financial aid in what Javice framed as „an Amazon for higher education,” and had the backing of billionaire Marc Rowan – the company’s lead investor.

All this schooling for what?

Her political donations are blue…

In September 2021, JPMorgan touted the $175 million deal to purchase Frank, calling the platform the „fastest-growing college financial planning platform” used by over 5 million students at 6,000 institutions.

However, shortly after JPM closed the deal with Javice, the bank discovered that most of the platform’s claimed 4.25 million users were fabricated, with the actual number totaling fewer than 300,000.

The five-week trial concluded after jurors deliberated for about six hours, reaching a verdict on Friday morning: they found Javice guilty on the most serious count of bank fraud, which carries a maximum prison sentence of 30 years.

Here are more details about the trial (courtesy of AP News):

Javice’s lawyer, Jose Baez, told the jury that JPMorgan knew what it was getting in the deal, and made up the fraud allegations due to buyer’s remorse after government regulatory changes made the data it received in the deal useless to its hopes of gaining new young customers.

. . .

Frank’s chief of engineering, Patrick Vovor, testified at the trial that Javice had asked him to generate synthetic data to support her claim that the company had over 4 million users. At the time, JPMorgan was insisting on verification of the customers. Vovor said he refused her request.

„I told them I would not do anything illegal,” Vovor testified.

Defense lawyers attacked Vovor’s credibility during the trial, suggesting he had a crush on Javice and was resentful that he had been rejected, a claim he denied.

Prosecutors said Javice then paid a college friend $18,000 to use a computer program to create millions of fake names with pedigree information. The results were sent to a third-party data provider that JPMorgan hired to verify the number of customers, but the data provider never checked to ensure the people were real, testimony showed.

At the peak, Javice regularly appeared on corporate media TV outlets, even appearing on Forbes’ „30 Under 30”…

There’s something about millennials appearing on Forbes’ „30 Under 30” and fraud.

Javice is a Miami Beach resident who was arrested in 2023 and has been free on a $2 million bail since. A sentencing date has not yet been set.

Whether she follows Elizabeth Holmes’ path: Delaying prison time through repeated pregnancies—remains to be seen. Her legal team will likely weigh this as a viable strategy.