NEW YORK (AP) — Charlie Javice, founding force behind the fintech startup Frank, was sentenced to over seven years in prison after being convicted of fraudulently inflating the number of students served by her company, ultimately leading to a $175 million deception against JPMorgan Chase.
In a ruling delivered by Judge Alvin K. Hellerstein in Manhattan federal court, it was determined that Javice falsely claimed that Frank had over 4 million customers when in reality, the total was fewer than 300,000. Hellerstein characterized the scheme as a “large fraud,” committed during the summer of 2021.
The judge acknowledged Javice's earlier contributions to charitable ventures, dating back to her childhood, which included organizing soup kitchens. However, he maintained that her actions in this case overshadowed her past deeds.
Defense attorneys argued that Javice had faced significant public scrutiny akin to what Elizabeth Holmes experienced during her trial for the Theranos scandal, claiming that she did create a functional company, unlike Holmes' ventures.
Prosecutors sought a lengthy sentence to underscore that fraud within startup sales holds equal responsibility as traditional fraud, particularly in a landscape increasingly plagued by deceptive practices from founders seeking investment.
During sentencing, Javice expressed her remorse, stating that she would “spend her entire life regretting” the decisions that led to her downfall and apologizing for the ripple effects of her actions.
Javice, who had been free on $2 million bail since her arrest in 2023, was ultimately convicted on multiple charges including conspiracy, bank fraud, and wire fraud. Her company, founded to simplify the completion of federal student aid applications, was seen as a tool for financially needy students prior to the scandal surrounding its acquisition by JPMorgan in 2021.
In a ruling delivered by Judge Alvin K. Hellerstein in Manhattan federal court, it was determined that Javice falsely claimed that Frank had over 4 million customers when in reality, the total was fewer than 300,000. Hellerstein characterized the scheme as a “large fraud,” committed during the summer of 2021.
The judge acknowledged Javice's earlier contributions to charitable ventures, dating back to her childhood, which included organizing soup kitchens. However, he maintained that her actions in this case overshadowed her past deeds.
Defense attorneys argued that Javice had faced significant public scrutiny akin to what Elizabeth Holmes experienced during her trial for the Theranos scandal, claiming that she did create a functional company, unlike Holmes' ventures.
Prosecutors sought a lengthy sentence to underscore that fraud within startup sales holds equal responsibility as traditional fraud, particularly in a landscape increasingly plagued by deceptive practices from founders seeking investment.
During sentencing, Javice expressed her remorse, stating that she would “spend her entire life regretting” the decisions that led to her downfall and apologizing for the ripple effects of her actions.
Javice, who had been free on $2 million bail since her arrest in 2023, was ultimately convicted on multiple charges including conspiracy, bank fraud, and wire fraud. Her company, founded to simplify the completion of federal student aid applications, was seen as a tool for financially needy students prior to the scandal surrounding its acquisition by JPMorgan in 2021.
