A woman from Florida, supported by affluent advisors, founded a company aimed at simplifying financial aid applications for college students. She began her trial on Thursday, facing serious criminal allegations of defrauding JPMorgan Chase & Co. during a $175 million acquisition deal.
According to Assistant U.S. Attorney Rushmi Bhaskaran, Charlie Javice, the founder of Frank, perpetrated a significant fraud by falsely claiming that her company had millions of clients, while in reality, the number was around 400,000. This deception occurred as she closed in on the buyout agreement in the summer of 2021. Bhaskaran presented these details during the initial statements of Javice’s trial, which also includes another former executive of Frank.
Javice’s defense attorney, Jose Baez, contended that the investigation leading to the charges was a result of JPMorgan feeling regret after the government modified regulations, making the acquisition impractical. He argued that the bank’s only escape from the deal was to accuse her of fraud.
At 31 years old, Javice, who resides in Miami Beach, Florida, was apprehended in April 2023 on charges including conspiracy, wire fraud, and bank fraud. Prosecutors claim that Javice, who made her mark on the Forbes 2019 “30 Under 30” list, stood to gain $45 million from this alleged fraudulent activity.
Bhaskaran indicated that prior to the acquisition’s completion, the bank sought verification of the purported four million customers. “They were so close to sealing a deal that would render them millionaires. The sole obstacle in their path was the truth,” she elaborated.
The prosecutor highlighted that Javice contacted a college acquaintance to purchase generic data on four million individuals, which ultimately facilitated the closing of the deal. “In the end, this house of cards, created from the defendants’ deceptions, collapsed,” added Bhaskaran.
In contrast, Baez maintained that his client conducted herself with integrity throughout the negotiations with JPMorgan and that she was brought on board as part of the buyout agreement, with a lucrative three-year contract that included substantial bonuses. He asserted that she was to become the “face of students” for JPMorgan, aiming to connect the bank with a desirable demographic of young banking customers.
Baez further explained that the acquisition was finalized over the course of 22 business days as the bank rushed to secure the startup, eager to access the profitable market of young clients before competitors could intervene. “They took a risk and it backfired, and now they intend to ruin a life over it,” he stated.
As Baez criticized the bank during his remarks, prosecutors raised multiple objections, prompting Judge Alvin K. Hellerstein to remind the jurors that the focus of the trial was Javice’s alleged misrepresentation, not the bank’s actions. A representative from JPMorgan declined to comment on the proceedings.
