Charlie Javice sentenced to 7 years in prison for JPMorgan Chase fraud

Charlie Javice arriving at a lower Manhattan federal courthouse for her sentencing hearing. Javice was found guilty of fraud for artificially inflating her customer numbers while selling her company to JP Morgan Chase for $175 million.

Spencer Platt/Getty Images

Charlie Javice has been sentenced to 7 years for tricking JPMorgan into paying $175M for her startup.
Javice was convicted of fraud in March for lying that her website, Frank, had 4 million Gen-Z users.
In fact, her student financial aid platform never had more than 300,000 users.

Charlie Javice is going to prison for the better part of a decade.

On Monday, a Manhattan federal judge sentenced Javice to seven years in prison for using wildly exaggerated data to fool JPMorgan Chase into paying $175 million for her startup — far more than the 18 months her lawyers asked for.

Javice’s prison sentence will be followed by 3 years of supervised release, resulting in a total 10-year sentence.

The former fintech wunderkind — who once graced Forbes’ 30 Under 30 list and scored a one-on-one meeting with JPMC’s powerful CEO, Jamie Dimon, during the 2021 sale negotiations — must also pay millions in restitution and forfeiture.

US District Judge Alvin Hellerstein ordered Javice to forfeit over $22 million in ill-gotten salary, stock, and bonuses she received for selling the company and working for a year as a managing director before the fraud was uncovered.

Javice must also share with her co-defendant Olivier Amar the burden of paying $287.5 million in restitution — the Frank sale price, plus more than $100 million that JP Morgan Chase was obligated under bank bylaws to pay them.

Hellerstein gave some credit to Javice’s own tearful courtroom comments earlier in the sentencing hearing, and to the letters submitted by friends and family who spoke to her good character. The judge said Javice’s crimes “required a great deal of duplicity,” but that she was “a good person who has done good deeds.”

“I don’t think you will be committing any crimes, and I think you will be devoting your life to service,” Hellerstein told Javice. “But others need to be deterred.”

Javice was convicted in March of conspiracy, wire, and bank fraud for using bogus user-base data to claim Frank — a platform that streamlined the federal financial aid application process, along with offering career and financial advice — had stockpiled the contact information for 4 million users. In fact, Frank never had more than 300,000 users.

Fighting back tears at Monday’s sentencing hearing, Javice, who is 32, said she wishes she could tell her younger self to take a different path.

“At 28, I did something that runs against the grain of my upbringing and every lesson I once claimed to have learned,” she said.

She implored forgiveness from JP Morgan investors whom she defrauded and from Frank employees and investors “whose name, career, or future was in some way stained by proximity to me.”

“Not a day goes by that I do not replay my mistakes, searching for meaning,” Javice said. “Not a day passes that I do not feel profound remorse.”

The Frank fraud

Prosecutors in the US Attorney’s Office for the Southern District of New York had sought a 12-year prison sentence and $300 million in restitution.

The hefty sum would compensate for the “enormous victim loss,” prosecutors argued.

Prosecutors said Javice pocketed $29 million of the $175 million Frank sale herself, while her defense lawyers put the figure closer to $21 million.

JPMorgan Chase had seen great marketing potential in Frank’s massive database of 4 million users, according to trial testimony. The bank wanted to use the contact information to pitch checking accounts, credit cards, and other banking products to college-age users at the start of their lifelong financial journeys.

“Based on the defendant’s lies, JPMC projected it could generate more than $500 million in revenue from selling banking products to Frank’s customers,” prosecutors argued.

“Had JPMC known the truth — that Frank had only a few hundred thousand users — the bank would not have acquired Frank,” they wrote.

Javice had hoped to get a break in both prison time and restitution by admitting wrongdoing and trying to convince the judge that the JPMorgan Chase-Frank merger was not a complete loss for the bank.

“Regardless of the number of users, Frank had real value,” her lawyers argued pre-sentencing.

Hellerstein had little patience with an argument from Javice’s lawyers that he should take into account JPMorgan’s mistake in buying Frank. According to Javice’s attorney, Ronald Sullivan Jr., JPMorgan made a mistake by rushing to purchase the startup before a competitor could buy it.

“A fraud remains a fraud whether you outsmart someone who is smart or someone who is a fool,” Hellerstein said.

At the same time, Hellerstein declined to force Javice to pay restitution for the legal fees JP Morgan says they paid to discover the fraud, saying it was part of the price of doing business.

Hellerstein also rebutted Javice’s claim that she deserved a sentencing break for admitting she did something wrong.

“She said she made a mistake,” the judge said of her letter to him. “She doesn’t admit she committed a crime. I don’t think it’s an acceptance of responsibility.”

In Monday’s sentencing hearing, Sullivan praised Javice’s good deeds that “were not in the newspapers” and implored the judge to take them into consideration.

According to Sullivan — citing a sheaf of letters from family, friends, and acquaintances who wrote to support Javice — the Frank founder assisted seriously ill family members, quietly paid grocery bills for people who were struggling, and gave opportunities to people who are traditionally excluded from certain career paths. He asked for 18 months of prison time.

“We think that that is more in line with what is fair for a woman who has done good for most of her life,” Sullivan said.

This is a developing story; please check back for updates.

Read the original article on Business Insider

Content Accuracy: Keewee.News provides news, lifestyle, and cultural content for informational purposes only. Some content is generated or assisted by AI and may contain inaccuracies, errors, or omissions. Readers are responsible for verifying the information. Third-Party Content: We aggregate articles, images, and videos from external sources. All rights to third-party content remain with their respective owners. Keewee.News does not claim ownership or responsibility for third-party materials. Affiliate Advertising: Some content may include affiliate links or sponsored placements. We may earn commissions from purchases made through these links, but we do not guarantee product claims. Age Restrictions: Our content is intended for viewers 21 years and older where applicable. Viewer discretion is advised. Limitation of Liability: By using Keewee.News, you agree that we are not liable for any losses, damages, or claims arising from the content, including AI-generated or third-party material. DMCA & Copyright: If you believe your copyrighted work has been used without permission, contact us at dcma@keewee.news. No Mass Arbitration: Users agree that any disputes will not involve mass or class arbitration; all claims must be individual.

Channels

Recently Played

Charlie Javice sentenced to 7 years in prison for JPMorgan Chase fraud

The Frank fraud

What Kamala Harris’ style has looked like throughout her career, from suits to sparkling gowns

I paid $300 to spend 2 nights in an Airstream trailer for the first time. I’ll never do it again in a city.

Sponsored Advertisement

Channels

Recently Played

Charlie Javice sentenced to 7 years in prison for JPMorgan Chase fraud

The Frank fraud

What Kamala Harris’ style has looked like throughout her career, from suits to sparkling gowns

I paid $300 to spend 2 nights in an Airstream trailer for the first time. I’ll never do it again in a city.

Related Posts

Starbucks just launched its new protein cold foam lineup. It nail ...

Gen Z is redefining the ‘lipstick effect’ with matcha and designe ...

Tesla doesn’t usually advertise its cars, but it’s spending on ad ...

Sponsored Advertisement