Who is Charlie Javice, the woman who duped Chase Bank?

NEW YORK (NewsNation) — The 31-year-old woman accused of deceiving JPMorgan Chase was released on a $2 million bond last Tuesday after she was arrested on fraud charges for drastically inflating the number of customers her company had before selling it to the financial giant.

Charlie Javice, the founder and former CEO of student loan assistance startup company Frank, was arrested last week at Newark Airport in New Jersey on conspiracy, wire and bank fraud charges.

A charging document in Manhattan federal court said she claimed her company had over 4 million users when it actually had fewer than 300,000 customers.

Authorities said Javice, who appeared on the Forbes magazine 2019 30 Under 30 list, would have earned $45 million from the transaction, including $21 million for the sale of her equity stocks in Frank and $20 million as a retention bonus when she was hired by Chase as part of the deal.

Javice, who lives in Miami, holds dual citizenship in the U.S. and France, according to a Bloomberg report. When signing her $2 million bond, she agreed to curfew and possible electronic monitoring if court officers decide it is necessary. She also agreed not to contact key figures in the case — including investors — except for her mother and her mother’s boyfriend.

In a release, U.S. Attorney Damian Williams said Javice “engaged in a brazen scheme” to defraud the acquiring financial company by fabricating data to support lies she told in a bid to make tens of millions of dollars from the sale of her company.

“This arrest should warn entrepreneurs who lie to advance their businesses that their lies will catch up to them,” he said.

Javice attended college at the Wharton School of the University of Pennsylvania, where she studied finance and law, according to her LinkedIn profile. Forbes reported that she graduated from the university in just three years in 2013.

At 24 years old in 2017, Javice founded Frank to provide an online platform to simplify the process of filling out the Free Application for Federal Student Aid, a free federal government form used by students to apply for financial aid for college or graduate school.

Javice had claimed to have “real-world experience” with financial aid and the “struggle to pay for college,” the New York Times reported. Even though Forbes reported that Javice grew up in affluent Westchester County, New York, where she “rode horses and attended the French-American School of New York.”

The Forbes report also said that Javice’s father worked at a hedge fund and her mother was a life coach. Javice even told The Daily Pennsylvanian, a student newspaper at the University of Pennsylvania, that her mother would frequently cry during conversations with financial aid officers. She called the process, “grueling” and “emotional.”

In an article announcing the sale of Frank, Javice said she started the company “with a rebellious spirit and big, big goal” that “students should pay less for college.”

She continued by saying that in just four years, Frank became the “leading and fastest-growing college financial-planning platform, serving over 5 million students at more than 6,000 colleges.”

In 2021, Javice, in her role as chief executive, sought to sell her company to a large financial institution, the complaint said.

When JPMC sought to verify that her company had 4.25 million customers, Javice asked her company’s director of engineering to create an artificially generated data set, but the individual declined, according to the complaint.

She then hired an outside data scientist to create the synthetic data set as she purchased for $105,000 on the open market real information for more than 4.25 million students, the complaint said.

JPMC agreed to purchase the company for $175 million after receiving what they believed at the time to be a complete data set of Frank users. The financial giant was eager to take over the financial aid company, announcing the acquisition in a news release.

“We want to build lifelong relationships with our customers,” Chase Co-CEO Jennifer Piepszak said in the release. “Frank offers a unique opportunity for deeper engagement with students. Together, we’ll be able to expand our capabilities for students and their families, helping them financially prepare for college and other major moments in their future.”

However, the complaint said JPMC discovered Javice had fabricated the data when they sought to begin a marketing campaign to those users and generated few responses, The New York Post reported.

In a civil complaint filed by the Securities and Exchange Commission, the regulatory agency alleged that Javice made numerous misrepresentations about Frank’s alleged millions of users to entice JPMC to purchase the now-shuttered Frank.

Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said in a release that “even non-public, early-stage companies must be truthful in their representations.”

He added: “Rather than help students, we allege that Ms. Javice engaged in an old school fraud: she lied about Frank’s success in helping millions of students navigate the college financial aid process by making up data to support her claims, and then used that fake information to induce JPMC to enter into a $175 million transaction.”

According to the Department of Justice, Javice was charged with one count of conspiracy to commit bank and wire fraud, one count of wire fraud affecting a financial institution, and one count of bank fraud. Each count she is charged with carries a maximum sentence of 30 years in prison. She also faces one count of security fraud, which carries a maximum sentence of 20 years in prison.

The Associated Press contributed to this report.