Charlie Javice is the 30-year-old founder of the fintech startup Frank, which the bank had paid $175 million to acquire. JP Morgan Chase sued it in December 2022. Morgan claims Javice misled it about the value of Frank by faking a sizable list of clients to persuade Morgan that the purchase was profitable.
According to the Wall Street Journal, Morgan filed the lawsuit in Delaware and named Javice and fellow Frank executive Olivier Amar as defendants. According to court filings, a purported fraud allegedly started in 2021 when Javice approached the bank about a purchase and claimed that Frank had 4.25 million members. At the time, the company had just under 300,000 users.
A few days before, Morgan sued Javice. Morgan fired Javice in November 2022 in Delaware. She filed her lawsuit. She claims in her lawsuit that Morgan owes her millions to make up for the money she spent defending herself when Morgan started its internal investigations. Javice claims that Morgan” deliberately fabricated a termination for cause in bad faith.”
Additionally, she claims Morgan avoids paying her $28 million in debt related to Frank’s initial purchase.
Frank was launched in 2016
Javice launched Frank in 2016. The business promised to make applying for student loans more accessible, and Javice allegedly wanted to turn it become “Amazon for higher education.” The lead investor in Frank, millionaire Marc Rowan, and many other renowned VCs backed her proposal since it was compelling enough.
The alleged fraud was anything but incidental, as stated in court records. Morgan asked Javice to prove that Frank had the number of subscribers he claimed. According to the lawsuit, Javice initially declined, citing privacy concerns. Moreover added “addresses, dates of birth, and other personal information for 4.265 million ‘students’ who did not actually exist.”
When they hired a data science professor for $18,000 to produce the phoney list. At that time Javice allegedly drew Amar into the plot. If Morgan’s claim is accurate, the list’s excessive detail may have ultimately led to the scam’s failure. Email addresses were among the “other personal information” referenced in court documents.
According to the WSJ, JP Morgan discovered a problem when it launched an email campaign using the same addresses. Moreover, discovered that 70% of the emails could not be delivered.
According to the complaint, Amar spent $105,000 to acquire a different data set of 4.5 million students. The data sets were bought from the business ASL Marketing. Screenshots of the professor’s bills are included in the complaint. They are alleging that Javice made great efforts to ensure that any documentation of this activity was either deleted or changed to avoid attracting attention. A request for comment from Amar and ASL Marketing has yet to receive a response.
