She swindled JP Morgan Chase.
Charlie Javice, the founder of the student loan application platform Frank, was convicted of defrauding JPMorgan Chase by significantly exaggerating the number of users on her platform before selling the company to the bank for $175 million. A federal jury found Javice and her executive, Olivier Amar, guilty of multiple charges, including fraud and conspiracy, each carrying a maximum sentence of up to 30 years in prison. Javice, who pleaded not guilty, did not testify during the trial.
Javice launched Frank in 2017 to help simplify the FAFSA process, offering a paid service designed to assist users with applying for financial aid. In 2021, JPMorgan purchased the startup after Javice presented it as a company with millions of users who could eventually become loyal customers for the bank’s products. However, JPMorgan later discovered that Frank had far fewer users than claimed, which led to a lawsuit in December 2022 and Javice’s arrest in April 2023.
The case centers on Javice’s creation of fake data to make it appear that Frank had millions of users. She first tried to convince the company’s engineering head to fabricate the data, but he refused. She then paid a data scientist to generate a list of over 4 million fake users. This fraudulent behavior led to significant financial losses for JPMorgan and prompted a federal investigation.
Javice’s legal team plans to appeal the verdict, arguing that Amar’s testimony undermined her defense by suggesting that she had intentionally misled him. The case has drawn parallels to the prosecution of Elizabeth Holmes, the former CEO of Theranos, who was convicted for defrauding investors, highlighting the growing trend of high-profile fraud cases in the tech world.
Meanwhile, the need for Frank’s original service—simplifying the FAFSA application process—has diminished due to changes in the system. In 2020, the FAFSA process was overhauled under legislation signed by President Trump, reducing the number of questions and allowing families to import tax data directly from the IRS. This has resulted in an increase in FAFSA usage, further reducing Frank’s relevance in the market.
