Charlie Javice, Convicted of Defrauding JPMorgan Chase, Sentenced to Over 7 Years in Prison By Christine Pelisek

A start-up founder convicted of defrauding banking giant JPMorgan Chase was sentenced to 85 months in federal prison on Monday, Sept. 29.

Charlie Javice, who was named on the Forbes “30 Under 30” list, was found guilty in March of conspiracy, wire fraud, bank fraud and securities fraud for inflating the number of customers of her company Frank in order to “fraudulently induce” JPMorgan to purchase it for $175 million, according to a press release from the U.S. Attorney’s Office for the Southern District of New York.

“Javice perpetrated a $175 million fraud—repeatedly lying about the success of her startup company and even hiring a data scientist to create fake data to back up her lies,” said prosecutor Amanda Houle.

Prior to her sentencing, Javice, 31, told the court she was “haunted that my failure has transformed something meaningful into something infamous,” Associated Press reported.

“Not a day goes by that I do not replay my mistakes, searching for meaning,” Javice said, per Business Insider. “Not a day passes that I do not feel profound remorse.”

“I don’t think you will be committing any crimes, and I think you will be devoting your life to service,” US District Judge Alvin Hellerstein told Javice during Monday’s sentencing, per Business Insider. “But others need to be deterred.”

According to prosecutors, Javice founded Frank in 2017 to help students simplify the process of filling out the Free Application for Federal Student Aid, a government form for students seeking financial aid for college or graduate school. 

Federal prosecutors said in 2021 Javice began to pursue buyers for Frank, one of which was JPMorgan.

“Javice represented repeatedly to those banks that Frank had 4.25 million customers or ‘users,’” according to a press release. “In fact, Frank had approximately 300,000 users.”

According to prosecutors, when the banking giant wanted to verify the number of Frank’s users and the amount of data collected about them, Javice allegedly created a “synthetic data set” to add more customers — and even “caused” a third-party vendor to “convey” the phony spreadsheet to JPMorgan.

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“They acquired a crime scene,” Assistant U.S. Attorney Micah F. Fergenson said, per AP.

Javice allegedly received more than $21 million for selling her equity stake and was scheduled to be paid around the same as a retention bonus, prosecutors said.

The judge imposed a forfeiture judgment of $22 million, per prosecutors.