General
Charlie Javice was sentenced to 85 months (approx 7 years) in federal prison on Monday for fraud. She was convicted in March of three counts of fraud and one count of conspiracy to commit fraud. Federal prosecutors had asked for 144 months, but the judge gave her 85 months instead.
Ms. Javice’s company, Frank, was supposed to help students fill out financial aid forms. Investors, however, saw Frank as a way to build a big list of customers that a bank might want to buy. JPMorgan Chase eventually bought Frank for $175 million, but the customer list was smaller than Ms. Javice told them, as reported by The New York Times.
General Charlie Javice fraud case
To fix this, Ms. Javice created “synthetic data” to add millions of fake customers with the help of Adam Kapelner, a math professor at Queens College, who said she would not tell him why she needed it. She and Olivier Amar, Frank’s chief growth officer, also bought real names and emails from commercial data brokers to make the customer list seem real because they knew the bank would test it.
Ms. Javice wrote to the judge, “I accept the jury’s verdict and take full responsibility for my actions”, and during the hearing she tearfully apologized to JPMorgan shareholders, its in-house team, her parents, her boyfriend, and Frank employees, as stated by The New York Times.
General JPMorgan frank acquisition scam
JPMorgan’s due diligence team did not detect the fraud during the acquisition, though the bank later figured out the scheme (source: report). Assistant U.S. Attorney Micah F. Fergenson said in court, “They acquired a crime scene”.
Ms. Javice’s lawyers, including Alexandra Shapiro, submitted 114 letters of support to ask the judge to be lenient. Supporters included four rabbis, a cantor, a formerly incarcerated judge, two doormen, and a marina worker near her Miami Beach home.
Some letters mentioned that Judge Hellerstein had spoken at a family funeral, and many highlighted Ms. Javice’s ongoing fertility treatments and worries that prison could affect her ability to have children, as per the report by The New York Times.
General FAQs
Q1. Who is Charlie Javice and why was she sentenced?Charlie Javice is the founder of Frank who was sentenced to 85 months in prison for fraud after providing fake customer data to JPMorgan Chase.
Q2. How did Charlie Javice commit fraud at JPMorgan?She created fake customer lists and bought real names to make her company appear more valuable during the $175 million acquisition by JPMorgan Chase.