Introduction to the Case

Charlie Javice, the founder of the student loan application startup Frank, which was acquired by JPMorgan for $175 million, has been found guilty of defrauding the bank by significantly exaggerating the number of customers.

Trial Outcome

Following a trial that lasted five weeks, the jury delivered a guilty verdict, concurring with the prosecution’s assertion that Javice fabricated the majority of Frank’s customer list to deceive JPMorgan into purchasing her startup.

Discrepancy in Customer Count

At the time of the acquisition in 2021, JPMorgan believed that Frank had approximately 4 million customers. However, the bank later discovered that the actual customer count was only about 300,000 after sending test marketing emails to alleged Frank users, with roughly 70% of the messages bouncing back.

Fabrication of Customer Data

It is alleged that Javice hired a math professor to generate fake customer data, which she then submitted to JPMorgan during the bank’s consideration of acquiring her company. This move was reportedly part of her strategy to inflate the startup’s value.

Defense and Plea

Javice’s defense team argued that the lawsuit stemmed from buyer’s remorse, triggered by a governmental change in the process of filling out financial aid forms. Javice entered a plea of not guilty and chose not to testify during the trial.

Potential Sentence

Now 32, Javice faces the possibility of being sentenced to several decades in prison. According to a report by CNBC, the sentencing is scheduled to take place in August.

Background on Charlie Javice

Javice founded Frank in 2017, at the age of 25. She gained notable recognition in 2019 when she was included in the Forbes 30 Under 30 list, acknowledging her achievements in the financial sector at a young age.