Charlie Javice, founder of a startup acquired by JPMorgan Chase for $175 million, is facing sentencing for defrauding the bank by overstating customer numbers. Javice and her chief growth officer were found guilty of fraud and conspiracy in March. Javice apologized in court, expressing remorse and asking for forgiveness.

JPMorgan purchased Frank to market financial products to students, believing the fintech firm had served over 5 million students. However, it was later discovered that Frank had fewer than 300,000 real customers. Javice allegedly fabricated user numbers before the acquisition, leading to her arrest in 2023 on fraud charges.

Javice’s attorney argued for a lighter sentence, highlighting the positive impact Frank had on people compared to cases like Elizabeth Holmes’ Theranos fraud. Assistant U.S. Attorney argued Javice’s crime was driven by greed, stating JPMorgan acquired a “crime scene.” The episode was embarrassing for JPMorgan, known for sophisticated acquisitions.

JPMorgan’s failure to verify customer numbers before acquiring Frank highlights the risks in the fast-paced fintech industry. The bank, led by CEO Jamie Dimon, had been on an acquisition spree to stay competitive against fintech and big tech rivals. The story is still developing, stay tuned for updates.

Read more at CNBC: Charlie Javice sentencing for defrauding bank