JPMorgan Accused of Scapegoating; Frank Founder Javice Charged With Fraud


Charlie Javice, a 31-year-old entrepreneur and founder of online college financial planning platform Frank, was charged with fraud by the US Attorney’s office on Tuesday. Javice was accused of fabricating data in order to make $45 million through her company’s $175 million sale to JPMorgan Chase & Co., to the detriment of the bank.

The criminal charges include conspiracy, wire fraud affecting a financial institution and bank fraud, each of which carries a maximum sentence of 30 years in prison if Javice is convicted. She was also charged with securities fraud, which has a 20-year maximum. The allegation has also prompted the US SEC to file an accompanying civil fraud case against Javice.

Javice argued in court documents that JPMorgan rushed to buy Frank without conducting due diligence and that it had asked her to fabricate data on Frank users in order to validate the full database of users. Alex Spiro, a lawyer for Javice, could not comment on the case.

JPMorgan, the largest US bank, had been actively seeking out financial technology firms in 2021 prior to its purchase of Frank. The deal, which was completed in September 2021, called for Javice to receive over $20 million in compensation, although the money has yet to be paid out.

The tech entrepreneur and Frank CEO also made it on Forbes’ “30 Under 30” list in 2019, and has since been in the spotlight as a successful young businesswoman who was able to launch a multi-million dollar company from the ground up.

However, JPMorgan’s CEO Jamie Dimon called the purchase of Frank a “huge mistake” in the wake of the fraud allegations against the site’s founder. The incident has called into question the bank’s reliability when it comes to learning lessons from past purchase decisions before plunging into such acquisitions.