Charlie Javice Sentenced to 7 Years for $175 Million JPMorgan Fraud

Charlie Javice, the founder of the college financial-aid startup Frank, was sentenced on Monday to more than seven years in prison for defrauding JPMorgan Chase of $175 million. She inflated the number of users of her company to secure the deal.

The 33-year-old entrepreneur was found guilty in March of falsifying records. She made it appear that Frank had over four million users, while in reality, it had fewer than 300,000.

Javice, a graduate of the University of Pennsylvania’s Wharton School, launched Frank to simplify the Free Application for Federal Student Aid (FAFSA). The company claimed to help students maximize aid and complete paperwork, while charging fees.

Frank attracted big investors, and Javice was listed in Forbes’ “30 Under 30.” She also appeared on television to promote her startup.

Before sentencing, Javice told the court that she was “haunted” by her actions and said with tears that she would regret her choice for the rest of her life.

Her lawyer argued that the case was unfair, describing it as “a 28-year-old against 300 investment bankers from the largest bank in the world.”

Judge Alvin K. Hellerstein admitted JPMorgan had failed in due diligence but said: “I am punishing her conduct and not JPMorgan’s stupidity.”

Javice was arrested in 2023 and released on $2 million bail. She was convicted of conspiracy, bank fraud, and wire fraud. The judge allowed her to stay free while she appeals the decision.

Her lawyers claimed that JPMorgan only had “buyer’s remorse” after acquiring Frank in 2021.

The case has been compared to Elizabeth Holmes, the founder of Theranos. Javice’s lawyer argued that unlike Theranos, Frank’s software actually worked and did not put lives at risk. He also claimed that JPMorgan rushed the deal because it feared a competitor might buy Frank first.