Charlie Javice, a 32-year-old founder of student finance startup Frank, has been convicted of fraud for defrauding JPMorgan Chase & Co. out of $175 million.
Once celebrated as a young entrepreneur on Forbes’ 2019 “30 Under 30” list, Javice now faces a maximum prison sentence of 30 years for bank fraud.
How She Did It: The Fraudulent Scheme
Javice convinced JPMorgan Chase to acquire Frank in 2021, falsely claiming that the platform had over 4.25 million users. In reality, it had fewer than 300,000.
Patrick Vovor, Frank’s former engineering chief, testified that Javice asked him to create fake user data, but he refused.
Adam Kapelner, a data scientist from Wharton, revealed that he was paid $18,000 to generate millions of fake users based on real customer data.
When questioned in court about a fabricated user named “Katherine Gordy,” Kapelner admitted: “Ms. Gordy does not exist.”
JPMorgan’s Discovery:
The fraud was exposed when JPMorgan sent out banking offers to Frank’s 4.25 million ‘users’—but only 10 people signed up.
The bank shut down Frank and launched an internal investigation, which eventually led to criminal charges.
Court Ruling & Statements
Javice and Olivier Amar, Frank’s former Chief Growth Officer, were convicted on four counts including Conspiracy, wire fraud, securities fraud and bank fraud.
Prosecutors compared her case to that of FTX founder Sam Bankman-Fried, who was sentenced to 25 years for financial fraud.
While Javice faces up to 30 years in prison, legal experts predict a lesser sentence. However, she remains in custody, awaiting sentencing.
There has been no public statement from her defense team, but JPMorgan executives have described the fraud as a “blatant deception that cost the bank millions.”
