Former CEO of Frank, Charlie Javice, has been arrested and charged with fraud related to her $175m deal to sell the student loan startup to JPMorgan. Javice is being charged with one count of conspiracy to commit bank and wire fraud, one count of wire fraud affecting a financial institution, one count of bank fraud and one count of securities fraud. Allegedly, Javice lied and fabricated data for the acquisition deal. Javice’s legal team has previously disputed the bank’s claims and has declined to comment on the latest developments.
Javice’s company, Frank, was a software startup helping students get the most out of the student loan process. Javice pitched Frank to JPMorgan with exaggerated claims of 4.25 million users, but in reality, the company had closer to 300,000 actual customers. She further claimed that Frank had seen 35 million website visitors since its founding in 2020. According to JPMorgan’s lawsuit, Javice produced a list of 4.265 million students who had allegedly begun the Free Application for Federal Student Aid (FAFSA) process through Frank, with 2.1 million students fully completing the application.
JPMorgan initially filed a lawsuit against Javice in December 2022, accusing Javice of swindling the company. Frank was acquired by JPMorgan Chase in September 2021 for an unreported amount of money. After Frank was acquired, Javice received over $45m.
Javice allegedly claimed that Frank was a TurboTax-esque software startup for students to get the most out of the student loan process. She raised $5 million in April 2020, which was then acquired by JPMorgan. Frank’s website has been closed and is no longer available. The message on the website reads, “Frank is no longer available. To file your Free Application for Federal Student Aid (FAFSA®), visit StudentAid.gov.”
Javice will be presented before U.S. Magistrate Judge Barbara Moses in the United States District Court Southern District of New York today. If found guilty, she faces the possibility of serving time in prison.