Frank Founder’s Trial Begins Over JPMorgan Deal

Charlie Javice, the Founder of student aid company Frank, is now on trial over claims that she tricked JPMorgan Chase into buying her company for $175 million.

Prosecutors said Charlie lied about how many students used Frank, giving false numbers to give the company a better image. They reported that she told the bank there were over four million student users, but in reality, the number was much lower.

In court, Assistant U.S. Attorney Bhaskaran said Javice and her colleague, Olivier Amar, used false information to convince JPMorgan to complete the deal.

The prosecutors said they worked together to create fake accounts to support their claims. The bank later discovered that the numbers did not match and filed a report against Javice.

Javice’s Lawyer Says JPMorgan Ignored Proper Checks Before Buying Frank

Javice’s lawyer, Jose Baez, said JPMorgan rushed to buy Frank without checking all the details. He noted that the bank was focusing on expanding its student loan business fast and is now trying to shift the blame. According to him, the bank did not check important details about the deal properly, and that caused the problem, not lies from Javice.

Judge Alvin Hellerstein said the case should focus on whether Javice gave false information during the deal or not. He explained that the case was about honesty in business, not about mistakes made by JPMorgan. His comments show the direction for the trial as both sides shared their arguments.

Javice was once seen as a young business leader. Experts said she was included in Forbes’ 30 list of under-30-year-old business tycoons. They believe those in the list are rising talents. Now, she faces fraud charges in court over the sale of her business. If the court finds her guilty, she could spend many years in prison.

Javice’s Lawyers Claim They Need A Mistrial

Javice’s court supporters asked for a mistrial, stating that there was not enough time to explain the case during the opening statement. They said this affected Javice’s right to a fair trial. The judge has not yet given a decision on the request, but said the trial will last for several weeks.

JPMorgan said buying Frank was a huge mistake and blamed false information. The bank trusted the numbers given by Javice but later found out they were not true. It believed Frank had millions of users, but that was not correct. This case shows the risk of buying companies without checking details carefully.

The court announced that more details about the deal between Javice and JPMorgan will be shared during proceedings. JPMorgan said witnesses who were part of the sale will speak. The firm also said the court will check documents to find out what really happened.