NEW YORK, NY – Charlie Javice, the disgraced CEO of student aid platform Frank, is headed to prison for 85 months. The sentence, handed down today by U.S. District Judge Alvin K. Hellerstein, is the culmination of a six-week jury trial that exposed a brazen $175 million fraud against J.P. Morgan Chase.
Acting under authority conferred by 28 U.S.C. § 515, Attorney for the United States Amanda Houle announced the sentencing. Javice and her co-defendant, Olivier Amar, were convicted of conspiracy, wire fraud, bank fraud, and securities fraud. The scheme revolved around artificially inflating the number of Frank’s users to entice JPMC into acquiring the company for a staggering $175 million.
“Javice perpetrated a $175 million fraud—repeatedly lying about the success of her startup company and even hiring a data scientist to create fake data to back up her lies,” Houle stated. “For that, Javice has been sentenced to 85 months’ imprisonment and ordered to pay over $300,000,000.” The attorney emphasized the severity of the crime and vowed continued prosecution of similar fraudulent schemes.
The court record reveals that Javice founded Frank in 2017, aiming to simplify the notoriously complex Free Application for Federal Student Aid (FAFSA) process. By 2021, she began seeking a sale of the company. She repeatedly claimed to both JPMC and other potential buyers that Frank boasted 4.25 million users. The reality? A mere 300,000. When JPMC demanded verification, Javice and Amar didn’t hesitate to fabricate an entire dataset. Their initial attempt to use an in-house engineer was thwarted when he raised legal concerns, prompting Javice to bluntly warn, “We don’t want to end up in orange jumpsuits.”
Undeterred, Javice then contracted an outside data scientist to generate the fraudulent data. The fabricated dataset was then passed through a third-party vendor to falsely confirm to JPMC the existence of over 4.25 million users. JPMC, relying on these lies, proceeded with the $175 million acquisition. Javice personally pocketed over $21 million from the sale of her equity and was slated to receive an additional $20 million as a retention bonus. Simultaneously, Javice and Amar attempted to cover their tracks by purchasing a real dataset of 4.5 million student records for $105,000, though it lacked the specific data fields they’d initially misrepresented.
The case serves as a stark warning: in the high-stakes world of startup acquisitions, dishonesty doesn’t pay. Javice’s calculated deception has cost her years of freedom and a massive financial penalty, while sending a clear message to others contemplating similar schemes: the Grimy Times – and the Department of Justice – are watching.
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Key Facts
- State: New York
- Agency: DOJ USAO
- Category: White Collar Crime
- Source: Official Source ↗
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