A federal prosecutor has accused Charlie Javice, founder of student aid startup Frank, of orchestrating a "brazen fraud" to deceive JPMorgan Chase & Co. into acquiring her company for $175 million.
During closing arguments in a Manhattan federal court on Wednesday, Assistant US Attorney Nicholas Chiuchiolo alleged that Javice inflated Frank's customer numbers to secure the deal.
Javice, once celebrated for her financial aid platform, falsely claimed that Frank had over 4.25 million users when the actual number was closer to 400,000, Chiuchiolo told the jury.
According to AP News, the alleged deception allowed Javice to personally gain $45 million from the acquisition.
Frank, founded in 2017, was designed to simplify the Free Application for Federal Student Aid (FAFSA) process, making it easier for students to apply for financial aid.
The company positioned itself as a tool to help financially disadvantaged students navigate the complex financial aid system. JPMorgan Chase sought to acquire Frank in 2021, in part to gain access to its supposed large user base of potential banking customers.
Is Frank founder Charlie Javice a genius or a swindler? Jury in $175M JPMorgan fraud trial will soon decide. https://t.co/NilQCS6X0L
— Business Insider (@BusinessInsider) March 23, 2025
Frank Founder Paid $105K to Fake User Data for JPMorgan
According to prosecutors, when JPMorgan requested verification of Frank's user numbers, Javice initially asked the company's head of engineering to create "synthetic data" to support the inflated figures.
The employee refused, stating he "would not do anything illegal." In response, prosecutors allege that Javice hired an external data scientist for $105,000 to fabricate a dataset reflecting more than 4.2 million customers, NYPost said.
Javice, who was included in Forbes' "30 Under 30" list in 2019, has denied the allegations. Her defense attorney, Jose Baez, argued that the case against her is "incredibly flawed" and lacks sufficient evidence.
He urged the jury to consider inconsistencies in the prosecution's claims and the absence of concrete proof that Javice knowingly engaged in fraud.
Throughout the five-week trial, prosecutors presented emails, text messages, and other communications to support their claim that Javice misled JPMorgan executives. They contend that she was aware of the discrepancy between Frank's actual user base and the figures she provided to the bank.
Javice did not testify in her own defense. As the trial concludes, the jury is expected to begin deliberations on Thursday to determine whether she is guilty of conspiracy and fraud charges. If convicted, she could face significant legal consequences.
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