Charlie Javice, the founder of the startup for student loan applications Frank which was acquired from JPMorgan at $175million was found guilty of committing fraud against the bank by massively increasing the number of customers.
After a trial lasting five weeks, Javice was found guilty by jury in a unanimous verdict, confirming the prosecutors’ assertions that she faked the majority of Frank’s customers to trick JPMorgan to acquire her company.
When JPMorgan acquired Frank by 2021 it was believed by the bank that Frank had four million customers. The bank discovered that the true number of customers was actually only 300,000 as it sent out tests of marketing emails to suspected Frank customers. Approximately 70% of the emails bounced back.
Javice is alleged to have hired a math professor to construct fake customer information that she then provided to JPMorgan as JPMorgan was looking to buy her business.
Defense lawyers argued that the lawsuit was the result of buyer’s remorse owing to a change made by the government regarding the manner to fill out financial aid documents. completed. Javice did not plead to be guilty and did not testify in the trial.
Javice who is currently 32, is likely to be sentenced to a period of up to 30 years in prison. The sentence is expected to occur in August, as per the CNBC report.
