Charlie Javice, the founder of student loan application startup Frank that was purchased by JPMorgan for $175 million, was found guilty on Friday of defrauding the bank by greatly inflating the customer count.
After a five-week trial, the jury found Javice guilty, agreeing with prosecutors’ claims that she fabricated the vast majority of Frank’s customer list to deceive JPMorgan into acquiring her startup.
When JPMorgan bought Frank in 2021, the bank thought the startup had 4 million customers. The bank found out that the actual customer count was only 300,000 when it later sent test marketing emails to alleged Frank users and approximately 70% of those messages bounced back.
Javice allegedly hired a math professor to create fake customer data, which she submitted to JPMorgan when the bank was considering buying her company.
Defense attorneys argued that the suit was a result of buyer’s remorse due to a government change in the way financial aid forms are filled out. Javice pleaded not guilty and didn’t take the stand during the trial.
Javice, who is now 32, could be sentenced up to decades in prison. The sentencing is expected to take place in August, according to a CNBC report.
Javice founded Frank in 2017 when she was in her mid-20s. In 2019, she was named to the Forbes 30 Under 30 list.