The Rise and Fall of Charlie Javice: How a Young Entrepreneur Lied Her Way into a Deal with JP Morgan

Charlie Javice dreamed of making college financial aid easier and more accessible for millions of students. She founded Frank, a start-up that claimed to simplify the process of filling out the Free Application for Federal Student Aid (FAFSA) and finding scholarships and loans (Justice.GOV). She pitched her vision to investors, media outlets, and potential partners, attracting attention and praise for her innovative idea.

But behind the scenes, Javice was hiding a dark secret: she had fabricated most of her customer data, inflating the number of users and their engagement with Frank’s platform. She hired a data science professor to create fake accounts and manipulate the data to fool anyone who looked into Frank’s performance. She lied about Frank’s partnerships with colleges and lenders and about the amount of money Frank had saved its users.

Her deception reached its peak when she convinced JP Morgan, the largest bank in America, to acquire Frank for $175 million in September 2021.

She presented Frank as an “acquisition machine” that knew more about its students than any other entity and that had a loyal and growing customer base of over four million users.

But it didn’t take long for JP Morgan to discover the truth. After conducting a marketing test using Frank’s data, the bank found that most of the users were fake or inactive and that Frank had no real value or competitive advantage. The bank sued Javice and her co-founder Olivier Amar for fraud, alleging that they had engaged in a “massive scheme” to defraud JP Morgan and enrich themselves.

Javice was arrested on April 4, 2023, at Newark Airport in New Jersey. She was charged with wire, bank, and securities fraud by federal prosecutors, who accused her of “falsely and dramatically” exaggerating Frank’s customer data in order to induce JP Morgan to acquire her start-up. She was also charged by the Securities and Exchange Commission (SEC) for violating federal securities laws. She faces up to 30 years in prison for each charge.

Javice has denied the allegations, saying she is innocent and will fight to clear her name. Her lawyer has said that JP Morgan is trying to scapegoat Javice for its own due diligence failures. Javice has also claimed that she was motivated by a genuine desire to help students access higher education and that she had personal experience with the challenges of financial aid.

But the evidence against Javice is overwhelming. The government has obtained emails, text messages, documents, and testimonies from former employees and associates that show how Javice orchestrated the fraud. The government has also seized millions of dollars from Javice’s bank accounts and assets.

Javice’s story is a cautionary tale of how a young entrepreneur with a promising idea can turn into a fraudster with a web of lies. It also exposes how vulnerable investors, media outlets, and even large corporations can be to deception and manipulation by charismatic founders who promise to disrupt an industry or solve a social problem.

Javice’s trial is expected to begin later this year. If convicted, she could spend the rest of her life in jail.