Charlie Javice, the founder of student loan startup Frank, was convicted on Friday of defrauding JPMorgan Chase by vastly inflating her company’s customer numbers before its $175 million acquisition.
After a five-week trial, the jury found Javice guilty. Siding with prosecutors who argued that she fabricated the majority of Frank’s customer base to mislead JPMorgan into purchasing her startup.
At the time of the 2021 acquisition, JPMorgan believed Frank had 4 million customers. However, the bank later discovered that the actual number was only 300,000. The discrepancy came to light when a test email campaign resulted in nearly 70% of messages bouncing back.
Prosecutors revealed that Javice hired a math professor to generate fake customer data. Which she submitted as part of the acquisition process. Defense attorneys countered that JPMorgan pursued the lawsuit due to “buyer’s remorse”. After a shift in government financial aid policies affected Frank’s business model. Javice, who pleaded not guilty, chose not to testify during the trial.
Now 32, Javice faces a potential prison sentence spanning several decades. Sentencing is expected in August, according to CNBC.
Javice launched Frank in 2017 while in her mid-20s, gaining widespread recognition, including a spot on Forbes’ 30 Under 30 list in 2019. However, her meteoric rise has now ended in a high-profile fraud conviction.
