Frank founder Charlie Javice was released on a $2 million bond after being charged with defrauding JPMorgan Chase in its $175 million acquisition of the college financial planning website by vastly inflating the number of its users.
Ms Javice, 31, “engaged in a brazen scheme to defraud” JPMorgan, Damian Williams, US attorney in Manhattan, said in a statement on Tuesday.
“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.”
The criminal charges include conspiracy, wire fraud affecting a financial institution and bank fraud, each of which carries a maximum sentence of 30 years in prison if Ms Javice is convicted. She was also charged with securities fraud, which carries a 20-year prison term.
Ms Javice, who is a dual citizen of France and the US, lives in Miami. She was arrested on Monday at Newark Liberty International Airport and produced before the Manhattan federal court on Tuesday.
Ms Javice surrendered her US and French passports and her travel is now limited to New York City and South Florida.
Her $2 million bond is to be guaranteed by two people and by the equity in her Miami home. She will observe a curfew and is not permitted to contact witnesses or current JPMorgan or former Frank employees.
Alex Spiro, a lawyer for Ms Javice, and a JPMorgan representative declined to comment.
Earlier on Tuesday, Ms Javice was sued for fraud by the US Securities and Exchange Commission.
‘30 under 30’
Ms Javice founded Frank in 2017 as an online platform to help college students fill in the Free Application for Federal Student Aid, or Fafsa. Forbes named her on its “30 Under 30” list for finance in 2019.
In 2021, she started looking for a buyer for the site, beginning the acquisition process with JPMorgan and a bank that is not named in the criminal complaint unsealed on Tuesday.
Javice engaged in a brazen scheme to defraud JPMorgan. 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
Damian Williams,
US attorney in Manhattan
She told both banks that Frank had 4.25 million customers who had signed up for accounts, according to the government. In reality, the authorities say Frank had fewer than 300,000.
Prosecutors claim that during the discussions with JPMorgan, Ms Javice asked Frank’s director of engineering to take the company’s actual customer data set and use it to create a larger, synthetic set.
The computer engineer, who is not identified, raised concerns, and said “I don’t want to do anything illegal”, according to the complaint.
Ms Javice and an unidentified co-conspirator said the request was legal.
‘Orange jumpsuits’
“We don’t want to end up in orange jumpsuits,” she told him, according to the complaint. The engineer, who is a current JPMorgan employee as a result of the acquisition, declined.
Ms Javice then hired an outside data scientist to create the phony set, falsely claiming the full database of Frank users was actually a smaller, random sample of a much larger database, the US says.
She allegedly used the new data to support her claim that the site had more than 4 million users in discussions with JPMorgan.
The bank, the nation’s largest, has been on a start-up buying spree since chief executive Jamie Dimon said in 2020 he wanted to acquire more financial technology companies focused on sustainable investing and tax issues.
JPMorgan, which acquired Frank in 2021, sued Ms Javice and another executive, Olivier Amar, in federal court in Delaware in December, alleging they used fake customer accounts to lead the bank into completing the deal by exaggerating the number of people using her site.
To cover up lies about Frank’s customers, Ms Javice bought sets of data on 4.5 million college students on the open market, according to the lawsuit.
Due diligence
Mr Amar was not named as an accused in either of Tuesday’s complaints.
Earlier, he said in a bid to dismiss JPMorgan’s lawsuit that he was not a party to the merger agreement and attended no more than one meeting with the bank before the deal.
Ms Javice, who has sued JPMorgan in Delaware state court to force the bank to cover her legal fees, claims it rushed to buy Frank without doing proper due diligence and was also trying to deflect attention from its violations of student privacy laws.
Ms Javice said in a response to JPMorgan’s suit that Mr Dimon pushed to acquire Frank out of fear that another bank was looking at the company, that she was being made a scapegoat for the bank’s faulty due diligence and that it was JPMorgan that asked her to come up with synthetic data on Frank users.
Ms Javice and JPMorgan agreed to the sale in August 2021, and it closed the next month.
The deal called for Ms Javice to get about $21 million from the merger and to continue working on Frank for the bank, with a $20 million retention bonus to be paid out over the next three years.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Grand Slam Los Angeles results
Men:
56kg – Jorge Nakamura
62kg – Joao Gabriel de Sousa
69kg – Gianni Grippo
77kg – Caio Soares
85kg – Manuel Ribamar
94kg – Gustavo Batista
110kg – Erberth Santos
Women:
49kg – Mayssa Bastos
55kg – Nathalie Ribeiro
62kg – Gabrielle McComb
70kg – Thamara Silva
90kg – Gabrieli Pessanha
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
UNpaid bills:
Countries with largest unpaid bill for UN budget in 2019
USA – $1.055 billion
Brazil – $143 million
Argentina – $52 million
Mexico – $36 million
Iran – $27 million
Israel – $18 million
Venezuela – $17 million
Korea – $10 million
Countries with largest unpaid bill for UN peacekeeping operations in 2019
USA – $2.38 billion
Brazil – $287 million
Spain – $110 million
France – $103 million
Ukraine – $100 million
RESULTS
Manchester United 2
Anthony Martial 30'
Scott McTominay 90 6'
Manchester City 0
Apple%20Mac%20through%20the%20years
%3Cp%3E1984%20-%20Apple%20unveiled%20the%20Macintosh%20on%20January%2024%3Cbr%3E1985%20-%20Steve%20Jobs%20departed%20from%20Apple%20and%20established%20NeXT%3Cbr%3E1986%20-%20Apple%20introduced%20the%20Macintosh%20Plus%2C%20featuring%20enhanced%20memory%3Cbr%3E1987%20-%20Apple%20launched%20the%20Macintosh%20II%2C%20equipped%20with%20colour%20capabilities%3Cbr%3E1989%20-%20The%20widely%20acclaimed%20Macintosh%20SE%2F30%20made%20its%20debut%3Cbr%3E1994%20-%20Apple%20presented%20the%20Power%20Macintosh%3Cbr%3E1996%20-%20The%20Macintosh%20System%20Software%20OS%20underwent%20a%20rebranding%20as%20Mac%20OS%3Cbr%3E2001%20-%20Apple%20introduced%20Mac%20OS%20X%2C%20marrying%20Unix%20stability%20with%20a%20user-friendly%20interface%3Cbr%3E2006%20-%20Apple%20adopted%20Intel%20processors%20in%20MacBook%20Pro%20laptops%3Cbr%3E2008%20-%20Apple%20introduced%20the%20MacBook%20Air%2C%20a%20lightweight%20laptop%3Cbr%3E2012%20-%20Apple%20launched%20the%20MacBook%20Pro%20with%20a%20retina%20display%3Cbr%3E2016%20-%20The%20Mac%20operating%20system%20underwent%20rebranding%20as%20macOS%3Cbr%3E2020%20-%20Apple%20introduced%20the%20M1%20chip%20for%20Macs%2C%20combining%20high%20performance%20and%20energy%20efficiency%3Cbr%3E2022%20-%20The%20M2%20chip%20was%20announced%3Cbr%3E2023%20-The%20M3%20line-up%20of%20chip%20was%20announced%20to%20improve%20performance%20and%20add%20new%20capabilities%20for%20Mac.%3C%2Fp%3E%0A
How being social media savvy can improve your well being
Next time when procastinating online remember that you can save thousands on paying for a personal trainer and a gym membership simply by watching YouTube videos and keeping up with the latest health tips and trends.
As social media apps are becoming more and more consumed by health experts and nutritionists who are using it to awareness and encourage patients to engage in physical activity.
Elizabeth Watson, a personal trainer from Stay Fit gym in Abu Dhabi suggests that “individuals can use social media as a means of keeping fit, there are a lot of great exercises you can do and train from experts at home just by watching videos on YouTube”.
Norlyn Torrena, a clinical nutritionist from Burjeel Hospital advises her clients to be more technologically active “most of my clients are so engaged with their phones that I advise them to download applications that offer health related services”.
Torrena said that “most people believe that dieting and keeping fit is boring”.
However, by using social media apps keeping fit means that people are “modern and are kept up to date with the latest heath tips and trends”.
“It can be a guide to a healthy lifestyle and exercise if used in the correct way, so I really encourage my clients to download health applications” said Mrs Torrena.
People can also connect with each other and exchange “tips and notes, it’s extremely healthy and fun”.
The biog:
From: Wimbledon, London, UK
Education: Medical doctor
Hobbies: Travelling, meeting new people and cultures
Favourite animals: All of them
Financial considerations before buying a property
Buyers should try to pay as much in cash as possible for a property, limiting the mortgage value to as little as they can afford. This means they not only pay less in interest but their monthly costs are also reduced. Ideally, the monthly mortgage payment should not exceed 20 per cent of the purchaser’s total household income, says Carol Glynn, founder of Conscious Finance Coaching.
“If it’s a rental property, plan for the property to have periods when it does not have a tenant. Ensure you have enough cash set aside to pay the mortgage and other costs during these periods, ideally at least six months,” she says.
Also, shop around for the best mortgage interest rate. Understand the terms and conditions, especially what happens after any introductory periods, Ms Glynn adds.
Using a good mortgage broker is worth the investment to obtain the best rate available for a buyer’s needs and circumstances. A good mortgage broker will help the buyer understand the terms and conditions of the mortgage and make the purchasing process efficient and easier.
