Charlie Javice found guilty of defrauding JPMorgan on $175 Million Purchase
The bank is preparing a civil lawsuit to try to recover some of the $175,000,000 it paid for Frank. It sued her in 2013 and Ms.Javice was arrested shortly after. Ms. Javice, 32, quickly became a go-to quote for journalists writing about paying for college and turned up on lists of under-30 and under-40 up-and-comers.
Not long after Ms. Javice sold Frank to JPMorgan, there was trouble. The bank tested Frank’s list of customers in an attempt to convince its young customers to open Chase Accounts. A bank executive testified that the Frank list had only opened 10 accounts. It was, as the bank put it in its own legal filing, “disastrous.”
An internal investigation ensued, and the bank claimed to have found evidence that Ms. Javice and Olivier Amar, Frank’s chief growth and acquisition officer, had faked much of its customer list. JPMorgan sued Javice, and the federal authorities followed suit with their own charges. The verdict was delivered on Friday. Amar was also charged and tried with Ms. Javice, and found guilty of all counts. A JPMorgan spokesman declined to comment on the verdict.
During the trial, JPMorgan bank executives said that one appeal of Frank was its promise of over four million customers, with detailed contact information, whom the bank could pitch. The bank could attract young adults by offering them a checking account, and then keep them for decades with mortgages and retirement funds. He asked her why, but she refused to tell him. He asked why, according to his testimony, but she would not tell him.
“I found my genius,” she said in a text to Mr. Amar at the time.
After Professor Kapelner did some quick work — including pulling an all-nighter — Ms. Javice asked him to remove any specifics about the data from his invoice and paid him $18,000 instead of the $13,300 on his original bill.
According to prosecutors, Ms. Javice and Mr. Amar knew and feared that the bank was going to use Frank’s list for marketing. The pair eventually bought real names and emails from commercial data providers to make it look like Frank really did have millions of customers who had given the company their names and contact information.
This, too, was a rush job to avoid getting caught, according to the prosecution. It produced a message exchange where Mr. Amar told Javice “You’ll be able to have 4.5 millions users today.” Javice replied “Perfect.” Ms. Javice asked that the specifics be removed from a bill for this transaction. Micah F. Fergenson said in court on Wednesday, “Why would you create a fake list of customers if you were not lying about your clients?”
