Charlie Javice, a tech start-up CEO and Forbes magazine ’30 Under 30’ honoree was arrested and charged with fraud for allegedly lying to J.P. Morgan Chase about the number of customers her firm services with its student loan assistance program.
“She lied directly to JPMC and fabricated data to support those lies — all in order to make over $45 million from the sale of her company,” U.S. Attorney Damian Williams said in a statement.
“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.”
Javice in Denial
Javice denies the allegations and her lawyer declined to comment.
The company, Frank, had been billed as a way to simplify the student loan application process. Javice is accused of fabricating data to make it appear as though the platform had millions of users in order to sell the company for $175 million.
She is charged with one count of conspiracy to commit bank and wire fraud, one count of wire fraud affecting a financial institution, and one count of bank fraud, each of which carries a maximum sentence of 30 years in prison. She also faces one count of securities fraud, which carries a maximum sentence of 20 years in prison.
Javice enlisted the help of a data scientist to create a fake database that was used to convince JP Morgan Chase the platform had more than 4.25 million users, according to charging documents.
The tech CEO also allegedly purchased real data on 4.25 million college students that she tried to pass off as her user data.
$2 million bond
Javice made an initial appearance in court on Tuesday, and she was released on a $2 million bond that restricts her to certain parts of New York and southern Florida.
FDIC-OIG Special Agent in Charge Patricia Tarasca said: “The allegations described in today’s criminal Complaint exemplify the many ways banks can be defrauded. The FDIC-OIG remains committed to holding individuals accountable who threaten the integrity of financial institutions, and we thank our law enforcement partners for their diligence and dedication to investigating such crimes.”
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