Criminal Trial Against Frank Founder Charlie Javice Has Begun
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Charlie Javice, the founder of a fintech Frank, who allegedly defrauded JP Morgan Chase into buying the firm, is now facing trial according to new reports.
Javice was accused of securities fraud, bank fraud, wire fraud, as well as conspiracy over JPMorgan’s $175 million purchase of college financial planning platform Frank in July 2021. She pleaded not guilty to the charges against her, and her lawyer argued in court that there was no fraud involved. Instead, they claimed that JPMorgan has “buyer’s remorse,” insisting that this is the reason why they are legally pursuing Javice.
JPMorgan Claims The Platform Has Over 4 Million Fake Customers
Back in late 2021, the bank agreed to buy Frank — a platform that provides an online portal where users can easily apply for financial aid. The application process is done in minutes, and they can even enroll in a catalog of online college courses.
However, in early 2023, the bank filed a lawsuit against Javice, who was the platform’s founder and CEO at the time. Currently 32, Javice was accused of producing a fake list of customers, complete with names, addresses, dates of birth, and other personal information.
The list allegedly consisted of 4.2 million “students” who don’t actually exist, according to JPMorgan. The bank claims that the portal only has around 300,000 real customers.
Soon after the accusations were made, Javice was arrested for conspiracy, wire fraud, and bank fraud. However, she was released on a $2 million bond.
Reports say that Javice’s lawyer, Jose Baez, said to the jurors during last week’s opening argument that JPMorgan undertook extensive due diligence into the Frank platform. Their in-depth research would have revealed the truth about the fake audience, if there was one, according to Baez. Instead, they decided to move forward with the purchase, knowing exactly how many clients the platform had.
Baez also added that the bank only made its claims more than a year after the deal went through after the financial aid regulations changed, and it decided that it wanted to back out of the agreement.
