The founder of the college financial planning platform named Frank was arrested on Monday in New Jersey for the charges against her raised by the Justice Department.
The 31-year-old Charlie Javice who is the founder of the financial planning platform was criminally charged by the Justice Department for defrauding the popular financial service company JPMorgan Chase out of $175 million.
Charlie Javice was arrested on Monday in New Jersey and she is expected to be present on Tuesday at the Manhattan Federal court.
Charlie Javice who once was named one of the 30 Under 30 by Forbes is currently accused of falsely and dramatically exaggerating the number of customers that her platform Frank had in order to facilitate the acquisition of her startup platform by the bank back in 2021.
Javice operated under the idea that a larger number of customers would make it easy for her company to be acquired by one of the world’s leading financial service provider companies. The alleged profit that Javice aimed to acquire from the deal was $45 million.
According to the information available, Charlie Javice is currently facing four counts of charges against her for the fraudulent deal that was planned by her.
Javice is accused of different charges with one count of wire fraud that has affected a financial institution, one count of conspiring to commit bank and wire fraud, one count of securities fraud, and the fourth count of bank fraud.
While the trial is still to take place, it should be noted that three charges among these four have a maximum sentence of 30 years in prison.
According to the United States Attorney for the Southern District of New York, Damian Wiliams, the arrest should be a warning to all upcoming startups and entrepreneurs who lie about their firms for their personal and business gains.
He also added that his office will make sure that the people who spread lies and commit fraud will be held accountable for putting their greed above the law. Along with the charges raised by the Justice Department, the Securities and Exchange Commission has also sued Javice for the alleged fraudulent schemes.
Charlie Javice has not spoken publicly about the charges that are raised against her. According to the statement made by a spokesperson for Javioce’s attorney, Javice denies all charges raised against her.
Also, there was no immediate response from JPMorgan regarding the case but in one of his statements made in January, the CEO of JPMorgan Chase & Co. made it clear that the acquisition of Frank was a huge mistake on the part of the company.
It was the lawsuit filed by JPMorgan that started the case which has now seen the arrest of 31-year-old entrepreneur Charlie Javice. The lawsuit was filed by the company almost a month back after the company realized that the number of customers claimed by Javice was not the actual number.
Javice convinced the company that Frank had around more than 4 million customers but in reality, the platform had only around 300,000 customers. The numbers and details about the customers have been mentioned by JPMorgan in the lawsuit that the company filed.
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According to the lawsuit filed by JPMorgan, Javice used the assistance of a data science professor to increase the number of customers on the platform when the bank pressed for confirmation regarding the customer number.
The company backed its claim of Javice’s connection with the data science professor by including the details of the emails shared between the two in their lawsuit. There are even records of Javice asking questions like ‘Will the fake emails look real with an eye check or better to have a unique ID?’
The fraud conducted by Javice and her company was brought to light when around 70% of the emails sent out to around 400,000 Frank customers by JPMorgan bounced back.
A detailed look into the authenticity of the customers and the number of customers of Frank was reviewed in detail by the company and it was then the fraud conducted by Charlie Javice was brought to light.
As the company faced a huge loss in terms of the deal, the platform Frank was closed down by JPMorgan in January.
After the fraud committed by Charlie Javice and the real face of Frank were revealed to JPMorgan, the company filed a lawsuit against her. As her response to the lawsuit filed by the bank, Charlie Javice filed a counterclaim in February.
In the counterclaim that she filed, Javice stated that the argument raised by JPMorgan was implausible.
She elaborated that it was not reasonable that the bank was made to believe that Frank has more than 4 million customers when the official website of Frank clearly and publicly mentioned that the platform has assisted more than 350,000 people who needed financial aid.
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