In closing remarks, prosecutor says Frank founder lied to JPMorgan Chase to secure $175 million deal
A prosecutor says a Florida woman engaged in a “brazen fraud” by selling her student aid startup to JPMorgan Chase & Co. for $175 million after dramatically exaggerating its customer base
NEW YORK (AP) — The young chief executive of a startup that claimed to have helped millions of college students apply for financial aid deployed a “brazen fraud” to sell the company to JPMorgan Chase & Co. for $175 million, a prosecutor said Wednesday in a closing argument to a jury in New York.
Charlie Javice, who appeared on Forbes' “30 Under 30” list in 2019, is accused of dramatically exaggerating the customer base of her company, which operated under the name Frank. She and another former top executive face conspiracy and fraud charges.
Javice's lawyer, Jose Baez, urged the jury to acquit his 32-year-old client, calling the case against her “incredibly flawed.” He cited a lack of evidence.
As he spoke, Javice smiled at times and turned her chair to face the jury.
Frank was created to simplify filling out the Free Application for Federal Student Aid, a complex government form used by students to apply for financial aid for college or graduate school.
Javice founded the company when she was in her mid-20s and was the subject of numerous media profiles that lauded her for building a system that would help financially needy students navigate a thicket of rules and eligibility requirements to get tuition aid.
The company once seemed like a pioneer among businesses that cater to college-age students, who banks encourage to open checking or credit card accounts in the hopes they’ll become lifelong customers.
Access to Frank's client list is one of the things JPMorgan Chase was after when it entered into talks to buy the company in 2021.
At the time, Javice was claiming Frank had over 4.25 million clients. In reality, it had around 400,000, Assistant U.S. Attorney Nicholas Chiuchiolo told the jury.
Citing emails, text messages and other evidence, Chiuchiolo said Javice repeatedly lied to JPMorgan in the summer of 2021 to secure a buyout that would earn her $45 million.
When JPMorgan Chase sought to verify the client list, Javice first approached her company's head of engineering, asking if he could produce “synthetic data” to show the company had over 4 million customers, the prosecutor said.
But the employee refused, saying he “would not do anything illegal,” Chiuchiolo said.
Javice eventually hired an outside data scientist for $105,000 to create a data set showing over 4.2 million students, prosecutors said.
Javice did not testify during the five-week trial. The Miami Beach, Florida, resident was arrested in April 2023 and is free on bail. The jury was expected to begin deliberations Thursday.
