Charlie Javice, the charismatic founder of a starting business claiming to be the way in the way university students apply for financial assistance, was convicted on Friday of cheating one of the largest US banks, JPMorgan Chase, out of $ 175 million by exaggerating her customer base ten times.
A jury in New York made its verdict after a five -week trial. Javice, 32, faces the possibility of a long imprisonment.
Javice was in the middle of the 20s when she founded Frank, a business with software that promised to simplify the process to fill in the free application for federal student assistance, a complicated form of government that students use to apply for assistance for the university or a postgraduate school.
The company has promoted itself as a way for financially needy students to get more help faster, in exchange for a few hundred dollars to fees. Javice regularly appeared on cable news programs to increase Frank’s profile, and once he appeared on Forbes’ “30 under 30” list before JPMorgan bought the beginning in 2021.
JPMorgan managers testified that she told them that she had more than four million customers and would have about 10 million by the end of the year, but it appeared that there were only about 300,000 customers.
Javice’s lawyer, Jose Baez, told the jury that JPMorgan knew what it was in the agreement, and that the fraud was the allegations of fraud because of the repentance of the buyer after the regulatory changes he received in the agreement made useless to obtain new young clients.
Javice is one of a number of young technical managers who have been disruptive or transformative businesses at fame and media awards, just to see their businesses collapse in the midst of questions about whether they were dealing with poffer and fraud while dealing with investors.
She founded the business not long after graduating from the University of Pennsylvania’s business school, and told the interviewers that she was motivated to help university students help make contact with financial resources because of her own frustrations that get the process of financial assistance.
Frank’s financial supporters included venture capitalist Michael Eisenberg. The company has offered a product similar to online tax preparation software that, according to students, can help maximize their financial assistance, while making the application process much less painful.
JPMorgan was interested in acquiring Frank partly because of the potential it saw in the so -called large list of satisfied customers of the beginning. The bank believed that the young, future college graduates could possibly be sold on the idea of a lifelong partnership with the financial institution.
After buying the company, JPMorgan said there was evidence that Javice lied about her number of clients.
Frank’s head of engineering, Patrick Vovor, testified during the hearing that Javice asked him to generate synthetic data to support her that the company had more than 4 million users. At the time, JPMorgan insisted on verifying the customers. Vovor said he refused her request.
“I told them that I would not do anything illegal,” Vovor testified.
Defense lawyers attacked Vovor’s credibility during the hearing, indicating that he had Javice a hug and was crazy that he was rejected, a claim he denied.
Prosecutors said Javice then paid a university friend $ 18,000 to use a computer program to create millions of false names with pedigree information. The results were sent to a third-party data provider who hired JPMorgan to verify the number of clients, but the data provider never checked to ensure that people really are, the evidence showed.
Baez said the bank knew what it was getting and the number of clients were hundreds of thousands of rather than millions.
“JPMorgan doesn’t tell the truth,” he said. “They knew the numbers.”
Javice, who lived in Miami Beach, Florida, has been free on $ 2 million bail since her arrest in 2023.
