The criminal proceedings against Charlie Javice, who stands accused of defrauding JPMorgan Chase in connection with the acquisition of her fintech venture, Frank, are currently underway.
Javice has entered a plea of not guilty to a series of charges, including securities fraud, wire fraud, bank fraud, and conspiracy. These accusations stem from JPMorgan Chase’s $175 million purchase of Frank, a platform designed to streamline the financial aid application process for students, made in July 2021.
In court, Javice’s attorney asserted that no fraudulent activity took place, suggesting that JPMorgan was experiencing “buyer’s remorse,” as reported by Reuters. The bank’s acquisition of Frank, which offers users a fast online portal to apply for financial aid and explore a range of online college courses, was finalized in late 2021.
However, in early 2023, JPMorgan Chase initiated legal action against Javice, who was the company’s founder and CEO at the time, alleging that she manufactured a list of “fake customers” with personal details for 4.265 million individuals who did not exist. The bank contends that Frank had approximately 300,000 genuine customers. Following these allegations, Javice was arrested on charges of conspiracy, wire fraud, and bank fraud, and subsequently released on a $2 million bond.
During the trial, Javice’s lawyer, Jose Baez, informed jurors that JPMorgan had conducted thorough due diligence on Frank and was aware of its actual customer base prior to the acquisition. Baez further maintains that the bank’s claims emerged only after a year had passed from the deal’s conclusion, coinciding with shifts in financial aid regulations that prompted JPMorgan to reconsider its commitment to the acquisition.