Charlie Javice, founder of student loan assistance platform Frank, has been convicted of defrauding JPMorgan Chase during the bank’s $175 million acquisition of her startup. A federal jury determined she intentionally misrepresented the company’s user base to secure the deal, concluding a high-profile five-week trial.
Prosecutors revealed that JPMorgan believed it was acquiring a platform with 4 million active users when finalizing the 2021 purchase. However, internal audits later exposed staggering discrepancies—70% of test emails sent to purported users bounced, indicating the actual customer base stood at approximately 300,000. Evidence showed Javice commissioned fabricated data sets, including hiring a mathematics professor to generate synthetic user profiles, to artificially inflate Frank’s growth metrics.
“This case underscores the critical importance of transparency in business acquisitions,” said legal analysts familiar with the proceedings. “The scale of deception impacted not just corporate stakeholders, but also public trust in startup valuations.”
Javice’s defense team argued the charges stemmed from buyer’s remorse, citing regulatory changes to federal student aid processes that affected Frank’s operations post-acquisition. The founder maintained her innocence but declined to testify during the trial.
Now facing potential decades in federal prison, Javice awaits sentencing scheduled for August. The conviction marks a dramatic fall for the entrepreneur once celebrated on Forbes’ 30 Under 30 list in 2019. Her startup, launched in 2017, initially gained traction by simplifying financial aid applications before the fraudulent practices came to light.
Industry experts suggest this case may lead to stricter due diligence processes for corporate acquisitions, particularly in the fintech sector. JPMorgan has initiated internal reviews of its merger protocols while regulators examine broader implications for startup accountability.
