In New York, a jury has heard closing arguments in the case against Charlie Javice, the young CEO of a startup accused of fraudulently selling her company to JPMorgan Chase & Co. for $175 million. This case involves the company Frank, which was founded with the aim of assisting millions of students in navigating the complicated process of applying for federal student aid. Prosecutors allege that Javice grossly inflated the company’s customer base to entice the banking giant into the acquisition.
Despite the glamorous recognition of being featured in Forbes’ “30 Under 30” list in 2019, Javice now faces serious allegations of conspiracy and fraud alongside another former executive. The prosecution, led by Assistant U.S. Attorney Nicholas Chiuchiolo, argued that Javice’s actions were a clear case of “brazen fraud.” Javice is accused of inflating Frank’s supposed clientele from an actual figure of around 400,000 to over 4.25 million when negotiating with JPMorgan Chase in 2021.
Defense lawyer Jose Baez urged the jury to acquit Javice, pointing to what he called a lack of solid evidence against her. Throughout the trial, Javice maintained her composure, occasionally smiling and facing the jurors directly. Her company, Frank, was intended to aid students, particularly those from financially challenged backgrounds, by simplifying the federal aid application process. Ultimately, this ease of use and access to Frank’s substantial client list were key attractions for JPMorgan.
During the investigation, Chiuchiolo revealed that when JPMorgan expressed intent to verify Frank’s client base, Javice initially approached her head of engineering to fabricate data, a request he declined on ethical grounds. Consequently, Javice outsourced the task, paying an external data scientist $105,000 to concoct a dataset falsely showing over 4.2 million users, prosecutors claim.
Although Javice did not take the stand during the five-week trial, the case has drawn attention and scrutiny since her arrest in April 2023. Javice, who resides in Miami Beach, Florida, is currently out on bail as the jury was slated to begin their deliberations on Thursday. The outcome will determine the young entrepreneur’s legal fate following these serious allegations of fraud and deceit.