From Yahoo Finance: 2025-03-28 15:01:00

Charlie Javice, founder of financial aid startup Frank, was convicted of defrauding JPMorgan Chase of $175 million by inflating customer numbers. Facing possible prison time, the case mirrors Elizabeth Holmes’ scandal. Javice, once a rising star on Forbes’ “30 Under 30,” now faces serious legal consequences.

Javice founded Frank as a solution to simplify student aid applications. Promising faster aid access for a fee, she boasted millions of clients to JPMorgan. However, evidence revealed only 300,000 customers, leading to her conviction on fraud charges. Her lawyer argued JPMorgan was aware of the deal’s details.

Javice’s legal team seeks to overturn the conviction, questioning the evidence’s sufficiency. The judge will decide next week. There’s a dispute over ankle monitors for Javice and co-defendant Olivier Amar before sentencing. Javice’s lawyers argue it hinders her new Pilates career.

Javice, out on bail, faces a potential prison sentence alongside Amar for conspiracy, bank fraud, and wire fraud. Prosecutors laud the conviction, emphasizing accountability for their deception. Javice joins a list of tech execs whose companies faced collapse due to questionable practices.

Frank, backed by venture capitalists, aimed to revolutionize financial aid processing. JPMorgan’s interest was sparked by Frank’s potential customer base. However, post-acquisition, JPMorgan discovered inflated numbers, leading to the fraud case. Synthetic data was fabricated to falsely support Frank’s success.

Javice’s chief software engineer testified that he was asked to falsify data, which he refused. Defense lawyers tried to discredit him, suggesting a personal motive. Prosecutors alleged Javice paid a friend to create fake names to deceive JPMorgan. The defense claimed JPMorgan was complicit in the deception.

Read more: Charlie Javice convicted of defrauding JPMorgan during $175 million sale of financial aid startup