It’s one of those stories that sounds like something Netflix would turn into an inspirational series: plucky young 20-somethings start a company that helps financially strapped students acquire financial aid for college. Then the founders strike it rich by selling the company to a big bank.
Then the story takes a turn that reflects a dark show about corruption that you might find on HBO or AppleTV+: the company’s founders fudged their data, making up clients to boost the company’s profile for the bank sale. It led to a major battle in court.
On Friday, a jury convicted 32-year-old Charlie Javice and her co-defendant, Olivier Amar, the founders of the startup Frank, of defrauding banking giant JPMorgan Chase out of $175 million by misrepresenting the company’s customer base and fraudulently claiming that Frank had 10 times the number of clients it actually had.
“Javice appeared sullen at the defense table as the verdict was read,” reports the Associated Press. “A lawyer placed her hand on Javice’s back. She brushed past reporters and didn’t speak as she left court.”
“Javice was in her mid-20s when she founded Frank, a company with software that promised to simplify the arduous process of filling out the Free Application for Federal Student Aid, a complex government form used by students to apply for aid for college or graduate school,” the report continues.
The wild success of Frank opened the door to high-profile appearances on cable news shows for Javice. She also made her way onto Forbes’ “30 Under 30” list because of her company’s runaway accomplishments. The only trouble was that much of it turned out to be a façade.
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“JPMorgan executives testified that Javice told them she had more than four million clients and would have about 10 million by year’s end, but it turned out there were only about 300,000 customers and a list verifying her outsized claim was largely bogus,” the AP reports.
Javice’s attorney, Jose Baez, claimed that the megabank was experiencing buyer’s remorse and that JP Morgan Chase knew what it was getting in acquiring Frank. Her legal team also asserted that the evidence was too flimsy to convict Javice.
The judge said that he would look at the insufficient evidence claim next week and also determine whether Javice and Amar should wear ankle monitors while they await sentencing. Javice has been free on $2 million bail since her arrest in 2023.
“Frank’s chief software engineer, Patrick Vovor, testified that Javice had asked him to generate synthetic data to support her claim that the company had more than 4 million users,” the AP explains. Vovor countered that he refused to do anything illegal.
“Seeking to dent Vovor’s credibility, defense lawyers suggested he was resentful that Javice didn’t want to date him,” the report adds. “He denied that.”
Ah yes, the Alexandria Ocasio-Cortez "he just wants to date me" defense strategy. That’s a classic. It’s just too bad it didn’t convince the jury.
When Vovor wouldn’t bite on fudging the numbers, Javice paid a friend $18,000 to create the fake Frank users. JP Morgan Chase never verified whether the users were real.
“While Javice and Amar may have thought that they could lie and cheat their way to a huge payday, their lies caught up with them, and they now stand convicted by a jury of their peers,” Acting Manhattan U.S. Attorney Matthew Podolsky said in a statement.
The court will sentence Javice and Amar on July 23. After that, we’ll see how long it takes studios to release their documentaries and dramas based on this wild case.
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