Charlie Javice, the founder of a startup that claimed to revolutionize the college financial aid application process, was found guilty on Friday of defrauding JPMorgan Chase out of $175 million by inflating her customer base by ten times.
The jury reached the verdict after a five-week trial in federal court in Manhattan. Javice, 32, and her co-defendant, Olivier Amar, now face the possibility of decades in prison. The case has drawn comparisons to the high-profile trial of Theranos founder Elizabeth Holmes.
As the verdict was read, Javice sat quietly at the defense table, her expression somber. A lawyer placed a hand on her back for support, but she brushed past reporters without speaking as she left the courtroom.
Javice was in her mid-20s when she launched Frank, a company that offered software designed to simplify the complicated process of completing the Free Application for Federal Student Aid (FAFSA), a government form used by students applying for financial aid for college or graduate school.
Frank marketed itself as a solution for financially struggling students to secure more aid quickly, charging a few hundred dollars in fees for the service. Javice frequently appeared on cable news shows to promote Frank, and she was even featured on Forbes’ “30 Under 30” list before JPMorgan acquired the startup in 2021.
JPMorgan executives testified that Javice claimed her company had over four million clients and would reach around 10 million by the end of the year. However, it was revealed that Frank had only about 300,000 customers, and the list she provided to support her claim was mostly fabricated.
Javice’s attorney, Jose Baez, argued to the jury that JPMorgan was fully aware of what it was purchasing in the deal. He suggested that the bank invented the fraud allegations out of buyer’s remorse after regulatory changes rendered the data from the acquisition useless for attracting new young customers.
Defense lawyers have requested the judge to overturn the verdict, asserting that the evidence presented was insufficient to support the conviction.
Judge Alvin K. Hellerstein announced he would hear arguments next week to address a dispute over whether Javice and Amar should be required to wear ankle monitors while awaiting sentencing on July 23. Javice’s attorneys argued that the device would interfere with her new job teaching Pilates classes for three to four hours daily.
Since her arrest in 2023, Javice has been out on $2 million bail.
Both Javice and Amar, who served as Frank’s chief growth and acquisition officer and was essentially its No. 2, were found guilty on all four counts in their indictments. These charges include conspiracy, bank fraud, and wire fraud, each carrying a potential sentence of up to 30 years in prison.
“While Javice and Amar may have thought they could deceive and manipulate their way to a massive payoff, their lies caught up with them, and they’ve now been convicted by a jury of their peers,” said Acting Manhattan U.S. Attorney Matthew Podolsky.
Javice is among several young tech executives who rose to prominence with companies claimed to be disruptive or transformative, only to face collapse amid scrutiny over allegations of exaggeration and fraud in their dealings with investors.
Javice founded Frank shortly after graduating from the University of Pennsylvania’s Wharton School of Business, driven by her own frustrations with the financial aid process.
Frank attracted investors, including venture capitalist Michael Eisenberg. The company marketed its service as similar to online tax preparation software, promising to help students maximize their financial aid while simplifying the application process.
JPMorgan showed interest in Frank, partly because it believed the company’s large user base could translate into lifelong customers among future college graduates. However, after acquiring Frank, the bank claimed to have uncovered evidence that Javice had fabricated details about the company’s success.
Frank’s chief software engineer, Patrick Vovor, testified that Javice instructed him to create fake data to back up her false claim that the company had over 4 million users.
When Vovor questioned the legality of creating fake data, prosecutors stated that Javice and Amar assured him it was legal and warned him not to end up in orange prison jumpsuits. Vovor testified that he refused to participate.
“I told them I wouldn’t do anything illegal,” Vovor told the jury.
To challenge Vovor’s credibility, defense attorneys suggested he harbored resentment because Javice wasn’t interested in dating him, a claim he denied.
Prosecutors claimed that Javice paid a college friend $18,000 to generate millions of fake names with fabricated background information. This data was then sent to JPMorgan’s third-party data provider, which, according to testimony, never verified the authenticity of the information.
“JPMorgan isn’t telling the truth,” Baez argued. “They knew the numbers were false.”
