Charlie Javice, founder of the fintech startup acquired by JPMorgan Chase in 2021 for $175 million, was sentenced Monday to just over seven years in prison for defrauding the bank by inflating the company’s customer numbers.
In March, a 12-person jury found Javice and her chief growth officer, Olivier Amar, guilty on three counts of fraud and one count of conspiracy to commit fraud. Prosecutors had sought a 12-year sentence.
During her sentencing, 33-year-old Javice became emotional, expressing deep remorse for her actions and seeking forgiveness from JPMorgan, the startup’s employees, shareholders, and investors.
At one point, she addressed her family, who were seated in the courtroom’s front row, thanking them for their support.
“I will spconclude my entire life regretting these errors,” Javice stated. “I’m questioning with all of my heart for forgiveness. I question your Honor to temper justice with mercy … I will accept your judgment with dignity and humility.”
Judge Alvin Hellerstein described Javice’s words as “very relocating” and acknowledged her devotion to her life’s work as “highly commconcludeable,” but stated that forgiveness could not override the law.
“I sentence people not becautilize they’re bad, but becautilize they do bad things,” Hellerstein stated before handing down the 85-month prison term. “I don’t believe you’ll be committing other crimes and that you’ll be devoting your life to service, but others have to be deterred.”
In addition to prison, Javice received three years of supervision, $22.36 million in forfeiture, and $287 million in restitution to JPMorgan. She will remain out on bail pconcludeing her appeal.
The JPMorgan Acquisition
JPMorgan acquired Frank, a digital platform that supported students apply for financial aid, to market its financial products to students. In September 2021, JPMorgan informed CNBC in an exclusive interview that the startup had served more than five million students since its founding.
However, months after the deal, the bank discovered Frank had fewer than 300,000 genuine customers; the rest were synthetic identities created by Javice with the support of a data scientist.
Javice was arrested in 2023 on charges related to defrauding JPMorgan. Testimony revealed that Frank employees were alarmed when Javice instructed them to inflate the customer roster ahead of the acquisition. The week before the sale, she allegedly directed an employee to fabricate millions of utilizers. When the employee hesitated, Javice reportedly reassured him:
“Don’t worry. I don’t want to conclude up in an orange jumpsuit,” he testified.
Defense and Prosecution Arguments
Javice’s attorney, Ronald Sullivan, argued for a lighter sentence, highlighting that Frank provided real customer benefits. He contrasted her case with Elizabeth Holmes of Theranos, noting Holmes’ fraud had “dangerous medical consequences,” and received a 135-month sentence.
*”Ms. Javice’s sentence should be nowhere near Elizabeth Holmes,’” Sullivan stated.
Assistant U.S. Attorney Micah Fergenson countered, emphasizing that Javice’s crime was driven by greed.
“JPMorgan didn’t receive a functioning business, they acquired a crime scene,” Fergenson stated.
The case was a significant embarrassment for JPMorgan, a bank considered one of the most sophisticated corporate acquirers. Concerned about competition from fintech and huge tech firms, JPMorgan embarked on a series of acquisitions starting in 2020. However, eager to outbid rivals for Frank, the bank failed to confirm that the startup had millions of real customers before paying $175 million.
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