Related Federal Cases
Former Startup CEO Charged in $175 Million Fraud Scheme
A brazen scheme to defraud J.P. Morgan Chase (JPMC) has landed former startup CEO Charlie Javice behind bars, according to a federal indictment unsealed in Manhattan federal court.
Javice, who made it to the Forbes 2019 ’30 Under 30′ list, allegedly inflated Frank’s customer numbers to $4.25 million, when in reality, the company had less than 300,000 users. This fabricated data was used to induce JPMC to acquire Frank for $175 million.
As part of the scheme, Javice created a synthetic data set with the help of a co-conspirator and a data scientist. The data set was then provided to a third-party vendor, who confirmed the fabricated numbers to JPMC.
Javice, who stood to gain over $45 million from the sale of her company, was arrested last night in New Jersey and will be presented before U.S. Magistrate Judge Barbara Moses later today.
U.S. Attorney Damian Williams warned entrepreneurs who engage in similar schemes, ‘Your lies will catch up to you, and this Office will hold you accountable for putting your greed above the law.’
Javice’s arrest and indictment serve as a reminder of the consequences of defrauding financial institutions and the importance of holding individuals accountable for their actions.
In or about 2017, Javice founded TAPD, Inc., d/b/a Frank, a for-profit company that offered an online platform designed to simplify the process of filling out the Free Application for Federal Student Aid (FAFSA).
According to the Complaint unsealed today, Javice repeatedly misrepresented to JPMC that Frank had 4.25 million customers or ‘users,’ when in reality, the company had less than 300,000 users.
The FDIC-OIG remains committed to holding individuals accountable who threaten the integrity of financial institutions, and we thank our law enforcement partners for their diligence and dedication to investigating such crimes.
Defendant: Charlie Javice
Criminal Charges: Falsely and dramatically inflating the number of customers of her company, Frank, to fraudulently induce J.P. Morgan Chase to acquire Frank for $175 million.
City and State: New York
Date: 2021
Sentence or Outcome: Currently being held without bail
Dollar Amounts: $175 million (acquisition price of Frank), $45 million (potential gain for Javice)
Key Facts
- State: New York
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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