J.P. Morgan Chase Scandal: Frank’s Former CEO Charged In $175 Million Fraud

Key Points:

• Former CEO of Frank Charged with Making False Claims and Submitting False Data to J.P. Morgan Chase in $175 Million Acquisition Fraud Scheme.
• Javice falsely claimed that Frank had 4.25 million customers but less than 300,000 users.

Charlie Javice has been charged with a $175 million acquisition fraud scheme. Javice falsely claimed that her company had 4.25 million customers to induce J.P. Morgan Chase to acquire it fraudulently.

Charlie Javice, the former CEO of Frank, has been charged with a staggering $175 million acquisition fraud scheme. According to the criminal complaint unsealed in Manhattan federal court, Javice falsely claimed that her company, Frank, had 4.25 million customers to induce J.P. Morgan Chase to acquire the company fraudulently. In reality, Frank had less than 300,000 users. Javice and a co-conspirator fabricated data and provided them to an agreed-upon third-party vendor to create synthetic data sets to support the false claims.

J.P. Morgan Chase agreed to purchase Frank for $175 million, and Javice stood to gain over $45 million from the fraudulent acquisition. As part of the deal, J.P. Morgan Chase hired Javice and other Frank employees. Javice received over $21 million for selling her equity stake in Frank and was to be paid another $20 million as a retention bonus. However, it was later discovered that Javice and her co-conspirator sought to purchase real data for over 4.25 million college students to cover up their misrepresentations.

Javice has been charged with conspiracy to commit bank and wire fraud, wire fraud affecting a financial institution, bank fraud, and securities fraud, each carrying a maximum sentence of 30 years in prison, and 20 years in prison, respectively.

Javice’s arrest should warn entrepreneurs who lie to advance their businesses that their lies will catch up to them. Damian Williams, the United States Attorney for the Southern District of New York, stated, “This arrest should warn entrepreneurs who lie to advance their businesses that their lies will catch up to them, and this Office will hold them accountable for putting their greed above the law.“

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