On April 4, Charlie Javice, founder and former CEO of Frank, was charged with defrauding JPMorgan Chase for $175 million. Javice is accused of falsely expanding the customer base of a fraudulent scheme in order to include the bank in the startup’s acquisition in 2021, with the intention of obtaining over $45 million from the scheme. She was arrested on April 3 and the U.S. attorney for the Southern District of New York warned that this serves as a warning to entrepreneurs who prioritize their greed above the law and lie about the development of their businesses. The attorney emphasized that they will be held accountable for their actions.
DOJ criminally charged Charlie Javice, founder of college financial planning platform Frank
With defrauding JPMorgan Chase out of $175 million
I notice a pattern pic.twitter.com/QUffrYva5S
— Romano (@RNR_0) April 4, 2023
According to a spokesperson for Charlie Javice’s attorney, Javice has denied any involvement in the alleged scheme and has pleaded not guilty to the charges.
Why Charlie Javice got arrested?
It’s important to note that the charges against Javice are still allegations at this point and she is presumed innocent until proven guilty in a court of law. However, if convicted, she could face severe penalties, including the possibility of imprisonment for up to 30 years. The allegations against Javice and the lawsuit filed by JPMorgan highlight the importance of transparency and honesty in business practices. False claims and fraudulent activities can have serious consequences, not only for the individuals involved but also for the reputation of the company and the trust of its investors and customers.
In February 2023, Charlie Javice submitted a counterclaim, arguing that the bank’s belief in her alleged claims was doubtful, given that her website only purported to assist roughly 350,000 people in obtaining financial aid. The acquisition was dubbed a mistake by Jamie Dimon, the head of the bank.
In 2016, Frank was founded with the aim of assisting students in obtaining loans and financial assistance. However, in 2017, the company faced charges from the United States Department of Education for misleading customers by falsely claiming to be affiliated with the U.S. government.
In 2018, Adi Omesy, co-founder of Frank, sued Charlie Javice for wage theft in Israel. In the same year, Javice claimed that Frank had secured financial aid of $28,000 for its users. After Frank was sold to JPMorgan, Javice became the managing director in 2021, but she was terminated from her position in September of the same year due to a lawsuit against her.
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