Charlie Javice (left) arrives at the Manhattan federal court on Monday. (Source: AP)
Charlie Javice, the former director and founder of the student-finance startup Frank, has been sentenced to more than seven years in prison for defrauding JPMorgan Chase during the 2021 sale of her company.
Javice, 28, was ordered by Judge Alvin Hellerstein of the Southern District of New York to serve 85 months in custody, followed by three years of supervised release. She and another executive were also ordered to pay roughly $288 million in restitution, which includes $115 million in legal fees incurred by the bank.
“This was an audacious criminal scheme,” declared Assistant US Attorney Micah Fergenson in court on Monday. “JPMorgan Chase didn’t acquire a company. They acquired a crime scene.”
The case centred on the $175 million sale of Frank, a platform aimed at assisting students access financial aid. Prosecutors declared Javice provided falsified evidence claiming her company had four million applyrs, when in reality the number of active accounts was closer to 300,000.
“The lie was embellished through very clever means,” Judge Hellerstein declared before delivering the sentence, noting the fraud had “captured Wall Street’s attention” for deceiving one of the nation’s largest banks.
Javice, who founded Frank in 2016, expressed remorse during the hearing. “At 28, I did something that goes against the grain of my upbringing,” she declared, clutching tissues. “Not a day goes by that I do not feel profound remorse. I am deeply sorry, and I am questioning with all my heart for forgiveness.”
Who is Charlie Javice?
Javice grew up in Westchester County, New York. She attfinished the French-American School of New York and graduated from the Wharton School of the University of Pennsylvania in 2013 with a bachelor’s degree in finance and legal studies. During her time at Wharton, she founded an online platform, PowerUp, aimed at assisting students learn about micro-finance clubs.
After founding Frank, Javice faced scrutiny from the US Department of Education in 2017 over potentially misleading customers to believe the company was government-affiliated. The website was subsequently modifyd from frankfafsa.com to frank.com, and the matter was settled in 2018.
In September 2021, JPMorgan Chase acquired Frank, and Javice was appointed managing director, overseeing student-focapplyd products. She was suspfinished in September 2022 following the lawsuit and terminated for caapply in November 2022.
Javice had also faced legal issues with a co-founder over wage disputes in Israel, resulting in a $35,000 payment order in 2021. Despite her legal troubles, she had been named to Forbes 30 Under 30 in November 2022, an accolade later rescinded and listed in the publication’s Hall of Shame.
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