A Florida woman faces fraud charges in a high-stakes legal battle with JPMorgan Chase over the $175 million acquisition of her student aid service, Frank.
At a Glance
- Charlie Javice, founder of Frank, is on trial for allegedly defrauding JPMorgan Chase
- Javice is accused of falsely claiming millions of customers when Frank only had about 400,000
- The trial involves charges of conspiracy, wire, and bank fraud
- Prosecutors allege Javice would have earned $45 million from the fraud
- Javice’s attorney claims JPMorgan experienced “buyer’s remorse” after regulatory changes
The Allegations: A “Massive Fraud”
Charlie Javice, the founder of student aid startup Frank, is facing serious allegations of fraud in a trial that has caught the attention of both the business and education sectors. Prosecutors claim Javice orchestrated a “massive fraud” by falsely inflating her company’s customer base to secure a lucrative $175 million buyout deal with JPMorgan Chase & Co.
According to the charges, Javice claimed Frank had millions of customers when in reality, the company only had approximately 400,000. This deception allegedly led JPMorgan to purchase the startup under false pretenses. Assistant U.S. Attorney Rushmi Bhaskaran didn’t mince words when describing the situation, stating, “They were this close to a deal that would make them millionaires. There was only one thing that stood in their way: the truth.”
🚨The First Big Fraud Trial of 2025 Kicks Off Feb 10th with Charlie Javice, the 31-year-old founder of Frank, in the hot seat.
Her alleged crime? Selling JPMorgan Chase a $𝟭𝟳𝟱 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 lie.
Once a Forbes 30 Under 30 rising star, she’s now the 8th member of that list to… pic.twitter.com/kCiPcWx1Ig
— Marcel van Oost (@oost_marcel) January 7, 2025
The Defense: “Buyer’s Remorse”
Javice’s defense team, led by attorney Jose Baez, is pushing back against these accusations. They argue that JPMorgan’s lawsuit is a case of “buyer’s remorse” after regulatory changes made the acquisition less appealing. Baez contends that Javice acted honestly throughout the process and was even hired by JPMorgan as part of the buyout deal.
The defense’s strategy appears to be shifting focus from Javice’s actions to JPMorgan’s motivations. However, it’s important to note that the trial is centered on whether Javice lied to secure the buyout, not on JPMorgan’s subsequent actions or decisions.
The Stakes: Millions and Reputation
The implications of this trial are significant. Prosecutors allege that Javice stood to gain $45 million from the deal. Beyond the financial aspects, the case raises questions about transparency and integrity in deals between startups and established corporations.
Javice was arrested in April 2023 on charges of conspiracy, wire, and bank fraud. The outcome of this trial could have far-reaching consequences, potentially influencing how future financial dealings between innovative startups and larger corporations are approached and scrutinized.
