Charlie Javice left the Federal Court in New York on August 23, 2023.
John Minchillo / AP
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tilting legend
John Minchillo / AP
New York – Charlie Javice, the charismatic founder of a start -up who claimed to revolutionize the way students apply for financial aid, was sentenced on Friday for having frauds one of the biggest banks in the world, JPMorgan Chase, out of $ 175 million by exaggerating his clientele ten times.
A jury returned the verdict after a five -week trial before the Federal Court in Manhattan. Javice, 32, and his co-defender, Olivier Amar, are faced with the possibility of decades in prison in a case that made comparisons with the founder of Theranos Elizabeth Holmes.
Javice appeared to be gloomy at the defense table while the verdict was read. A lawyer placed his hand on Javice’s back. She brushed journalists and did not speak by leaving the court.
Javice was in mid-Vings when she founded Frank, a company with software that promised to simplify the difficult process of filling out free assistance for federal students, a complex government form used by students to request university assistance or higher education.
The company has promoted as a way for students financially needing to get more aid faster, in exchange for a few hundred dollars in costs. Javice appeared regularly on cable information programs to increase Frank’s profile, appearing once on the “30 Under 30” list of Forbes before JPMorgan buys the startup in 2021.
The leaders of JPMorgan testified that Javice had told them that she had more than four million customers and that he would have about 10 million by the end of the year, but it turned out that there were only about 300,000 customers and a list verifying his disproportionate complaint was largely false.
Javice lawyer Jose Baez, told the jury that Jpmorgan knew what he obtained in the agreement, accusing the bank of compensating for fraud allegations due to the buyer’s remorse after regulatory changes made the data he received in the unnecessary agreement in his hopes of winning new young customers.
Defense lawyers asked the judge to cancel the verdict, arguing that proof was not sufficient to maintain the conviction.
Judge Alvin K. Hellerstein said he would hear arguments on this subject next week and would resolve a dispute as for whether Javice and Amar were to wear ankle monitors while waiting for the conviction on July 23. Javice lawyers have argued that the device interferes with its new career: teaching pilates lessons for three or four hours a day.
Javice, who lived in Florida, has been free from a bond of $ 2 million since her arrest in 2023.
Javice and Amar, the chief agent of the growth and acquisition of Frank and in fact his n ° 2, were sentenced for the four charges in their accusation acts, in particular the conspiracy, banking fraud and the accusations of wire fraud which are each liable to a sentence that can go up to 30 years in prison.
“While Javice and Amar may have thought that they could lie and deceive their way to a huge day of pay, their lies have caught up with them, and they are now condemned by a jury of their peers,” the American Manhattan lawyer Matthew Podolsky said in a statement.
Javice was part of a number of young technological executives who have made glory with allegedly disruptive or transformative societies, only to see them collapse in the question of whether they had engaged in puffs and fraud while dealing with investors.
Javice founded Frank little time after graduating from the University of Pennsylvania Wharton School of Business, saying that she was motivated by her own frustrations navigating in the financial aid process.
Frank’s donors included the venture capital Michael Eisenberg. The company said that its offer, similar to online tax preparation software, could help students maximize financial aid while making the demand process less painful.
JPMorgan was partly interested because of the potential he saw in the supposed list of Frank of satisfied customers. The bank believed that these future college graduates could become life customers for life. But after buying the company, Jpmorgan said he found evidence that Javice had lied about Frank’s success.
Frank’s chief engineer Patrick Vovor testified that Javice had asked him to generate synthetic data to support his assertion that the company had more than 4 million users.
When Vovor asked if it was legal, the prosecutors said that Javice and Amar assured him that it was – and told him that they did not want to end up in orange prison combinations. Vovor testified that he had refused to help.
“I told them that I wouldn’t do anything illegal,” Vovor told jurors.
Seeking to work the credibility of Vovor, the defense lawyers suggested that he was resentful that Javice did not want to go out with him. He denied this.
The prosecutors said Javice had ended up paying a friend of the college $ 18,000 to create millions of false names with information from Pedigree. The results were sent to the JPMorgan third -party data supplier, but the testimony has shown that the company had never checked to make sure people were real.
“JPMorgan does not tell the truth,” said Baez. “They knew the figures.”
