Charlie Javice, founder of the fintech startup acquired by JPMorgan Chase in 2021 for $175 million, was sentenced Monday to just over seven years in prison for defrauding the bank by inflating the company’s customer numbers.
In March, a 12-person jury found Javice and her chief growth officer, Olivier Amar, guilty on three counts of fraud and one count of conspiracy to commit fraud. Prosecutors had sought a 12-year sentence.
During her sentencing, 33-year-old Javice became emotional, expressing deep remorse for her actions and seeking forgiveness from JPMorgan, the startup’s employees, shareholders, and investors.
At one point, she addressed her family, who were seated in the courtroom’s front row, thanking them for their support.
“I will spend my entire life regretting these errors,” Javice said. “I’m asking with all of my heart for forgiveness. I ask your Honor to temper justice with mercy … I will accept your judgment with dignity and humility.”
Judge Alvin Hellerstein described Javice’s words as “very moving” and acknowledged her devotion to her life’s work as “highly commendable,” but stated that forgiveness could not override the law.
“I sentence people not because they’re bad, but because they do bad things,” Hellerstein said before handing down the 85-month prison term. “I don’t think you’ll be committing other crimes and that you’ll be devoting your life to service, but others have to be deterred.”
In addition to prison, Javice received three years of supervision, $22.36 million in forfeiture, and $287 million in restitution to JPMorgan. She will remain out on bail pending her appeal.
The JPMorgan Acquisition
JPMorgan acquired Frank, a digital platform that helped students apply for financial aid, to market its financial products to students. In September 2021, JPMorgan told CNBC in an exclusive interview that the startup had served more than five million students since its founding.
However, months after the deal, the bank discovered Frank had fewer than 300,000 genuine customers; the rest were synthetic identities created by Javice with the help of a data scientist.
Javice was arrested in 2023 on charges related to defrauding JPMorgan. Testimony revealed that Frank employees were alarmed when Javice instructed them to inflate the customer roster ahead of the acquisition. The week before the sale, she allegedly directed an employee to fabricate millions of users. When the employee hesitated, Javice reportedly reassured him:
“Don’t worry. I don’t want to end up in an orange jumpsuit,” he testified.
Defense and Prosecution Arguments
Javice’s attorney, Ronald Sullivan, argued for a lighter sentence, highlighting that Frank provided real customer benefits. He contrasted her case with Elizabeth Holmes of Theranos, noting Holmes’ fraud had “dangerous medical consequences,” and received a 135-month sentence.
*”Ms. Javice’s sentence should be nowhere near Elizabeth Holmes,'” Sullivan said.
Assistant U.S. Attorney Micah Fergenson countered, emphasizing that Javice’s crime was driven by greed.
“JPMorgan didn’t get a functioning business, they acquired a crime scene,” Fergenson said.
The case was a significant embarrassment for JPMorgan, a bank considered one of the most sophisticated corporate acquirers. Concerned about competition from fintech and big tech firms, JPMorgan embarked on a series of acquisitions starting in 2020. However, eager to outbid rivals for Frank, the bank failed to confirm that the startup had millions of real customers before paying $175 million.
