Charlie
Javice received an 85-month prison sentence this week for fabricating customer
data to dupe JPMorgan Chase into buying her financial aid startup Frank for
$175 million, capping a fraud case that exposed lapses in the bank’s due
diligence process.
Frank Founder Gets
Seven-Year Prison Sentence for $175 Million JPMorgan Fraud
Judge Alvin
Hellerstein of the U.S. District Court for the Southern District of New York
handed down the sentence after a jury found Javice, 33, and her Chief Growth
Officer Olivier Amar guilty in March on three fraud counts and one conspiracy
charge. Federal prosecutors had pushed for a 12-year term.
Javice
broke down while addressing the court, telling Hellerstein she felt profound
remorse and asking forgiveness from JPMorgan, her former
employees, shareholders and investors. She turned to her family in the
courtroom’s front row to apologize and thank them for their support.
“I
will spend my entire life regretting these errors,” Javice said. “I’m
asking with all of my heart for forgiveness. I ask your Honor to temper justice
with mercy … I will accept your judgment with dignity and humility.”
Hellerstein
acknowledged her words were moving and praised her life’s work as commendable,
but said he couldn’t grant the forgiveness she sought. He sentenced her not
because she’s a bad person, but because deterrence matters.
“I
don’t think you’ll be committing other crimes and that you’ll be devoting your
life to service, but others have to be deterred,” the judge told Javice.
Charlie Javice sobs in court as she’s sentenced to 7 years in prison for swindling JPMorgan out of $175 million: ‘I am no longer a source of pride for my family’ https://t.co/mb1fy0m7qS pic.twitter.com/hMSJMYYrNy
— New York Post (@nypost) September 29, 2025
Fake Accounts Masked Tiny
User Base
JPMorgan
bought Frank in September 2021 to reach college students with banking products.
The bank told CNBC at the time that the platform had served more than five
million students since Javice founded it.
That number
was fiction. JPMorgan found out months after closing the deal that Frank had
fewer than 300,000 actual customers. Javice created the rest using synthetic
identities with help from a data scientist, according to court records.
The fraud
unfolded in the week before the sale. Javice directed an employee to fabricate
millions of users. When the employee refused, she tried to reassure him.
“She
said: ‘Don’t worry. I don’t want to end up in an orange jumpsuit’,” the
employee testified earlier this year.
$287 Million Tab for
Failed Deal
Besides
prison, Hellerstein ordered Javice to serve three years of supervised release,
forfeit $22.36 million and pay JPMorgan $287 million in restitution. She’ll
stay out on bail while appealing.
Her
attorney Ronald Sullivan argued for leniency, pointing out that Frank actually
helped some customers and contrasting the case with Elizabeth Holmes’s Theranos
fraud, which had “dangerous medical consequences.” Holmes got 135
months.
“Ms.
Javice’s sentence should be nowhere near Elizabeth Holmes’,” Sullivan told
the judge.
Assistant
U.S. Attorney Micah Fergenson disagreed, calling Javice’s crime greed-driven.
“JPMorgan
didn’t get a functioning business, they acquired a crime scene,” Fergenson
said.
Bank’s Buying Spree
Backfires
The episode
embarrassed JPMorgan, considered among the most sophisticated corporate buyers.
CEO Jamie Dimon
had launched an acquisition push starting in 2020, snapping up fintech
companies to counter threats from tech giants and upstart competitors.
But the
bank’s rush to beat rival bidders for Frank meant it never verified the
customer numbers before writing a $175 million check. Javice, who had been
featured on Forbes’s “30 under 30” list, was arrested in 2023 after
JPMorgan discovered the fraud and shut down Frank.
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This article was written by Damian Chmiel at www.financemagnates.com.
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