JPMorgan Chase defrauded: Another 30 under 30 star convicted

Big news. Charlie Javice, the founder of the student-finance startup Frank, has been convicted. The charge? Defrauding JPMorgan Chase & Co.

Remember Frank? It was supposed to help students fill out their FAFSA forms. JPMorgan Chase bought it for a cool $175 million back in 2021. But here’s where the story takes a turn.

The Big Lie About Users

Chase found out Javice lied. A big one. She claimed Frank had over 4. 25 million users. The real number? Less than 300,000.

Ouch.

Javice, a Wharton School grad and a “30 Under 30” honoree, claimed Frank was on track for 10 million users. That’s what JPMorgan exec Wims Morris testified during the trial.

Creating Fake Users

To hit that 10 million mark, Javice allegedly asked Frank’s former engineering chief, Patrick Vovor, to create fake users. He said no.

Javice turned to Adam Kapelner, a data scientist from Wharton. He testified he was paid $18,000 to create data. He didn’t know what it was for, he claimed.

He created millions of users using real information.

The result? Fake people in the system.

As Bloomberg reported, when asked about a user named “Katherine Gordy,” Kapelner said, “Ms. Gordy does not exist. ”

Red Flags Everywhere

JPMorgan sent offers to Frank’s supposed 4. 25 million users. How many new checking account customers did they get? Just 10.

Major red flag!

That’s when the investigation started. The platform was shut down. And a criminal investigation began.

The Verdict

Javice and her co-defendant, Olivier Amar, Frank’s former chief growth officer, were both convicted. The charges? Conspiracy, wire fraud, securities fraud, and bank fraud.

Javice could face up to 30 years for bank fraud, the most serious charge. But experts think she might get a lower sentence.

It’s a tough situation. Another “30 Under 30” star in trouble. It’s similar to Sam Bankman-Fried, who is now serving 25 years for fraud.