Who is Charlie Javice? JPMorgan sues 'Amazon for higher education' startup founder over 4M fake users
NEW YORK CITY, NEW YORK: JPMorgan is suing a 30-year-old entrepreneur, claiming that it was duped into spending $175 million to purchase her education firm. According to JPMorgan Chase, Charlie Javice fabricated four million fictitious customers in order to boost the legitimacy of her fintech company Frank before selling it to the bank in 2021.
Javice, who founded the company in 2019 at the age of 24, was included on the 2019 list of Forbes' 30 under 30. Frank, which was previously called "the Amazon of higher education," provides software to streamline the application process for student loans for Americans seeking financial help. The lawsuit claims that Javice and another executive at the business, Olivier Amar, paid a data scientist $18,000 to compile a list of fictitious clients when its own employee refused, Daily Mail reports.
Who is Charlie Javice?
According to Miami-Dade property records, Javice, the daughter of a successful financial manager located in New York, bought an apartment in Miami Beach in May 2021 for a little under $1.5 million. In an interview on her business success with a former tutor that the university posted on its YouTube page, she revealed that she founded Frank a few years after earning her MBA from Wharton.
According to the lawsuit, which JPMorgan filed in a US District Court in Delaware last year, Javice sold the firm on the "lie" that more than four million people had signed up to utilize the service. "To cash in, Javice decided to lie, including lying about Frank’s success, Frank’s size, and the depth of Frank’s market penetration in order to induce JPMC to purchase Frank," the bank stated in its suit, according to CNBC. She and another executive Olivier Amar are accused of creating a database including bogus students' names, addresses, schools, and dates of birth after the bank sought evidence of that assertion as part of its due diligence. According to the statistics, Frank had roughly 4,265,000 customer accounts, but only about 300,000 of them were valid. According to the Wall Street Journal, the scam crumbled when the bank attempted to email those users, and 70% of the emails bounced back.
In connection with the merger with JPMorgan, Javice received $10 million, with the other $20 million coming as a bonus. According to Forbes, Amar earned $5 million on the deal and a bonus of a similar $3 million. According to their LinkedIn accounts, both joined JPMorgan following the acquisition. Alleged email conversations between the hired data scientist and Javice, in which they describe the fraud's methodology, are included in the court document, CNBC reported. "Our plan was to sample first name and last name independently and then ensure none of the sampled names are real," the data scientist stated to Javice, as per the suit. In one conversation, Javice reportedly asked the professor: "Will the fake emails look real with an eye check or better to use unique ID?"
The Frank controversy is a humiliating move for JPMorgan, which heralded its "desire to have lifelong, engaged relationships with all of our customers" when it acquired the business.