Javice Trial: Frank Founder’s Fraud Case Delayed Amid Defense Preparations

Charlie Javice, the young entrepreneur accused of deceiving JPMorgan Chase in a $175 million acquisition deal, will now face trial next year, according to several published reports. A Manhattan federal judge on Monday (Sept. 23) granted Javice’s request to postpone her criminal trial, originally scheduled for Oct. 28, until Feb. 10.

Javice, who founded the college financial aid platform Frank, argued that her new legal team, hired in August, needed additional time to prepare her defense. She also claimed that JPMorgan had not provided all the documents necessary for her case.

Federal prosecutors allege that Javice inflated the number of Frank users prior to its 2021 sale to JPMorgan. The bank subsequently sued Javice for fraud, and she was indicted in April 2023. Her co-defendant, Olivier Amar, a former Frank executive, was charged later.

The case is part of a series of prosecutions in which the Manhattan U.S. attorney’s office has portrayed Wall Street banks as victims of fraud. The case has also drawn attention due to Javice’s cultivation of a public persona as a young, innovative entrepreneur, similar to Sam Bankman-Fried who was founder of the crypto exchange FTX and Alameda Research trading firm. Fried was eventually tried, convicted and sentenced to 25 years in prison. 

In Javice’s case, the allegations center on a scheme to deceive JPMorgan Chase into acquiring Frank for $175 million in 2021. JPMorgan Chase bought Frank to add the company’s tools for students, part of CEO Jamie Dimon’s plan for the bank to be “much more aggressive” in its approach to acquisitions.

When the complaint was filed in April 2023, the SEC contended Javice grossly inflated Frank’s user numbers, claiming access to data on 4.25 million students when the actual number was under 300,000. The DOJ has charged Javice with bank fraud, wire fraud and securities fraud, which carry potentially decades-long prison sentences if she’s convicted.   

Javice’s defense argues that JPMorgan failed to conduct proper due diligence and rushed into the deal, using an internal investigation as a pretext to terminate Javice and avoid paying her a retention bonus.

In a 2019 interview with PYMNTS, Javice highlighted the need for Frank, stating: “Students didn’t need another loan product, but rather someone to help them avoid leaving money on the table as they amassed large debts.”