In this article, you will get all the information regarding Frank founder Charlie Javice allegedly scammed JPMorgan into $175M deal with fake data: feds
The 31-year-old founder of a college financial aid startup named Frank was slapped with criminal fraud charges Tuesday after he used falsified customer data to get JPMorgan Chase to buy his firm for $175 million.
Charlie Javis, who was featured on the iconic Forbes “30 Under 30” List In 2019 in finance, was arrested Monday night in New Jersey and charged with multiple counts of fraud, the Fed said Tuesday.
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Prosecutors allege that during sales talks with JPMorgan Chase and another unnamed bank, Javis repeatedly claimed that Frank had 4.25 million users. However, the startup actually had data for fewer than 300,000 users, according to court papers.
When JP Morgan asked for proof of Frank’s user base, Javis allegedly paid an “external data scientist” $18,000 to create a fake customer list. The forged data reportedly helped secure JPMorgan’s commitment to a deal.
“As alleged, Zevice engaged in a brazen scheme to defraud JPMC during the $175 million acquisition deal,” US Attorney Damian Williams said in a statement. “He lied directly to JPMC and fabricated data to support those lies – to make over $45 million from his company’s sales.”
Frank was founded in 2017 and introduced as a tool for college students and their parents to help streamline the college financial aid application process.
The feds said Jevice received a payment of $21 million for selling an equity stake in Frank to JPMorgan and an additional $20 million in retention bonuses. Other employees of Javis and Frank were also given jobs in the bank.
The federal complaint alleges that Javis initially contacted Frank’s director of engineering to create the fake data sets. When the engineer pushed back on the request, Javis attempted to reassure the employee that it was legal.
“We don’t want to end up in the orange jumpsuit,” Javis said, according to the complaint.
JPMorgan realized the scam when it launched an email marketing campaign to individuals on Frank’s list of alleged clients, which generated few responses.
Javis was charged with one count of conspiracy to commit bank and wire fraud, one count of wire fraud, one count of bank fraud, and one count of securities fraud. Each charge carries a maximum sentence of 20 or 30 years in prison.
The Frank founder also faces several civil charges from the SEC.
SEC’s enforcement chief Gurbir Grewal said JeVice was involved in “old school fraud”.
“She lied about Frank’s success in helping millions of students navigate the college financial aid process by fabricating data to support her claims, and then tricked JPMC into entering into a $175 million transaction,” Grewal said. used that fake information to inspire.”
When contacted for comment, a representative for Javis said she “denies the allegations.”
Javis’s attorney, Alex Spiro, and a representative for JPMorgan declined to comment.
JPMorgan formally closed Frank in January — with CEO Jamie Dimon describing the bank’s acquisition of the startup as a “huge mistake.”
As The Post reported, JPMorgan filed a lawsuit against Javis in December with similar allegations detailed in criminal and civil cases.
Joyce alleges he was fired last November as head of Student Solutions so JPMorgan could avoid paying a $20 million bonus.
At the time, her attorney, Spiro, described the allegations in the JPMorgan lawsuit as “nothing but a cover-up”.
“After JPM acquired Charlie’s Rocketship business, JPM realized they couldn’t work around existing student privacy laws, committed misconduct and then renegotiated the deal,” Spiro told The Post in a January email. Tried to start.”
“Charlie blew the whistle and then sued.”
JP Morgan retaliated by telling The Post that Javis “was not and is not a whistleblower.”
Spiro is best known for representing Elon Musk during his legal battle over the acquisition of Twitter.
Frank founder Charlie Javice allegedly scammed JPMorgan into $175M deal with fake data: feds
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