Charlie Javice, the founder of the student loan application startup Frank, acquired by JPMorgan for $175 million, was convicted on Friday for allegedly deceiving the bank by drastically overstating her company’s customer base.
After a trial lasting five weeks, the jury sided with the prosecution, determining that Javice had fabricated most of Frank’s customer data to mislead JPMorgan into purchasing her business.
JPMorgan had believed that Frank had 4 million customers at the time of the acquisition in 2021. However, subsequent test marketing emails revealed that only about 300,000 of those accounts were genuine, with approximately 70% of the emails bouncing back. Authorities claim that Javice even enlisted a math professor to generate the fraudulent numbers she presented during the sale.
In her defense, Javice’s attorneys argued that the lawsuit was driven by buyer’s remorse following a governmental change in the completion process for financial aid forms. Javice, 32, pleaded not guilty and chose not to testify during the trial. If convicted, she faces the possibility of decades in prison, with sentencing anticipated in August, according to CNBC.
Javice launched Frank in 2017 when she was in her mid-20s, and by 2019, she had earned a spot on Forbes’ 30 Under 30 list.
Frank was founded with the goal of demystifying and streamlining the financial aid process for college students. The company built an online platform designed to simplify the notoriously complex Free Application for Federal Student Aid (FAFSA) form, allowing students to complete their applications in minutes rather than hours.
It was intended to help financially needy students secure more aid quickly, and it even offered premium services, such as one-on-one financial support and cash advances, to help cover tuition and other college expenses. Its innovative approach and rapid growth caught the attention of major investors and led to its acquisition by JPMorgan Chase in 2021.
