Charlie Javice, the founder of Frank, a college financial planning startup, is facing serious fraud charges related to her sale of the company to JPMorgan Chase in 2021. JPMorgan bought Frank for $175 million, believing the startup had millions of users. However, Javice allegedly inflated the user base by fabricating customer data. Federal prosecutors claim she manipulated the numbers to show Frank had about 4 million users when, in reality, it had fewer than 300,000.
According to the charges, when JPMorgan requested user data to verify the company’s claims, Javice worked with a data scientist to create a fake dataset, complete with fabricated names and emails. This deception led the bank to complete the purchase, paying Javice $21 million for her equity and an additional $20 million for future employment at the bank. The fraud unraveled when JPMorgan attempted to use the data for marketing purposes and found significant discrepancies.
Javice was arrested in April 2023 and charged with securities fraud, wire fraud, bank fraud, and conspiracy. She pleaded not guilty to all charges and is currently free on a $2 million bail while awaiting trial. If convicted, Javice could face up to 100 years in prison. Her case has drawn comparisons to other high-profile fraud cases, such as that of Elizabeth Holmes, the founder of Theranos.
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