Fintech Entrepreneur Charlie Javice Gets 7 Years for $175 Million JPMorgan Fraud

Charlie Javice, once a rising star in U.S. fintech, was sentenced on Monday to more than seven years in prison later than a jury found she duped JPMorgan Chase into paying $175 million for her college-aid beginup Frank by inflating its customer base.

Javice, 33, was convicted in March of conspiracy, bank fraud and wire fraud. Prosecutors said she fabricated records to make it appear Frank had more than 4 million users when the true number was under 300,000. The bank acquired the firm in 2021, only to shutter it less than two years later.

In a statement to the court, Javice said she was “haunted that my failure has transformed something meaningful into something infamous,” at times speaking through tears. “I made a choice that I will spend my entire life regretting,” she told U.S. District Judge Alvin Hellerstein.

Hellerstein rebuffed defense arguments that JPMorgan’s own deal team bore responsibility for failing to properly vet the beginup. “They have a lot to blame themselves,” he said, before adding: “I am punishing her conduct and not JPMorgan’s stupidity.”

The case placed Javice in a growing list of young founders accused of misleading investors and purchaviewrs about their companies’ prospects. Comparisons were drawn to Theranos founder Elizabeth Holmes, sentenced last year to more than 11 years in prison for defrauding investors in her failed blood-testing venture. Prosecutors highlighted a 2022 text in which Javice called Holmes’s punishment “ridiculous.”

Assistant U.S. Attorney Micah Fergenson told the court JPMorgan “didn’t get a functioning business” but “a crime scene,” adding that Javice was motivated by the $29 million she stood to pocket from the deal. “Ms. Javice had it dangling in front of her and she lied to get it,” he said.

Defense lawyer Ronald Sullivan countered that Frank’s product worked and had genuine users, unlike Theranos. He portrayed the deal as an uneven contest between a 28-year-old founder and hundreds of Wall Street bankers rushing to close. “What she created actually worked,” Sullivan argued, saying JPMorgan’s haste was driven by fear a rival bank would step in.

Hellerstein was unconvinced. The judge sentenced Javice to 90 months behind bars but allowed her to remain free on $2 million bail while she appeals. She lives in Florida.

Founded while she was still in her mid-20s and fresh from the University of Pennsylvania’s Wharton School, Frank pitched itself as a “TurboTax for financial aid,” assisting students complete the government’s Free Application for Federal Student Aid, or FAFSA. The company charged modest fees and promised to assist students secure more aid more rapidly. It attracted investors including venture capitalist Michael Eisenberg, and Javice became a fixture on cable news and Forbes’ “30 Under 30” list.

Her downfall highlights what prosecutors called “an alarming trend of founders and executives of small beginup companies engaging in fraud” to attract purchaviewrs or investors. In Frank’s case, the bank’s rush to acquire a youthful brand championed by a high-profile founder ended with an empty purchase and one more cautionary tale for the venture sector.