Charlie Javice Sentenced for Defrauding JPMorgan Chase

Charlie Javice is going to prison for the better part of a decade.

On Monday, a Manhattan federal judge sentenced Javice to seven years in prison for using wildly exaggerated data to fool JPMorgan Chase into paying $175 million for her startup — far more than the 18 months her lawyers asked for.

Javice’s prison sentence will be followed by 3 years of supervised release, resulting in a total 10-year sentence. The judge ordered her to report to prison 60 days after she exhausts her appeals to higher courts.

The former fintech wunderkind — who once graced Forbes’ 30 Under 30 list and scored a one-on-one meeting with JPMC’s powerful CEO, Jamie Dimon, during the 2021 sale negotiations — must also pay millions in restitution and forfeiture.

US District Judge Alvin Hellerstein ordered Javice to forfeit over $22 million in ill-gotten salary, stock, and bonuses she received for selling the company and working for a year as a managing director before the fraud was uncovered.

Javice must also share with her co-defendant Olivier Amar the burden of paying $287.5 million in restitution — the Frank sale price, plus more than $100 million that JP Morgan Chase was obligated under bank bylaws to pay them in legal fees.

Hellerstein gave some credit to Javice’s own emotional courtroom comments earlier in the sentencing hearing, and to the letters submitted by friends and family who spoke to her good character. The judge said Javice’s crimes “required a great deal of duplicity,” but that she was “a good person who has done good deeds.”

“I don’t think you will be committing any crimes, and I think you will be devoting your life to service,” Hellerstein told Javice in the lower Manhattan courtroom. “But others need to be deterred.”

Javice’s family members appeared relieved by the sentence. Following the hearing, they shared smiles and embraces — and declined to comment to the press in the hallway.

Javice was convicted in March of conspiracy, wire, and bank fraud for using bogus user-base data to claim Frank — a platform that streamlined the federal financial aid application process, along with offering career and financial advice — had stockpiled the contact information for 4 million users. In fact, Frank never had data for more than 300,000 users.

Fighting back tears at Monday’s sentencing hearing, Javice, who is 32, said she wishes she could tell her younger self to take a different path.

“At 28, I did something that runs against the grain of my upbringing and every lesson I once claimed to have learned,” she said in the courtroom.

She implored forgiveness from JP Morgan investors whom she defrauded and from Frank employees and investors “whose name, career, or future was in some way stained by proximity to me.”

“Not a day goes by that I do not replay my mistakes, searching for meaning,” Javice said. “Not a day passes that I do not feel profound remorse.”

The Frank fraud

Prosecutors in the US Attorney’s Office for the Southern District of New York had sought a 12-year prison sentence and $300 million in restitution.

The hefty sum would compensate for the “enormous victim loss,” prosecutors argued.

Prosecutors said Javice pocketed $29 million of the $175 million Frank sale herself, while her defense lawyers put the figure closer to $21 million.

JPMorgan Chase had seen great marketing potential in Frank’s massive database of 4 million users, according to trial testimony.

The bank wanted to use the contact information to pitch checking accounts, credit cards, and other banking products to college-age users at the start of their lifelong financial journeys.

“Based on the defendant’s lies, JPMC projected it could generate more than $500 million in revenue from selling banking products to Frank’s customers,” prosecutors argued.

“Had JPMC known the truth — that Frank had only a few hundred thousand users — the bank would not have acquired Frank,” they wrote.

Javice had hoped to get a break in both prison time and restitution by admitting wrongdoing and trying to convince the judge that the acquisition was not a complete loss for JP Morgan.

“Regardless of the number of users, Frank had real value,” her lawyers argued pre-sentencing.

Hellerstein had little patience with an argument from Javice’s lawyers that he should take into account JPMorgan’s mistake in buying Frank. According to Javice’s attorney Ronald Sullivan Jr. JPMorgan made a mistake by rushing to purchase the startup before a competitor could buy it.

“A fraud remains a fraud whether you outsmart someone who is smart or someone who is a fool,” Hellerstein said.

At the same time, Hellerstein declined to force Javice to pay restitution for the legal fees JP Morgan says they paid to discover the fraud, saying it was part of the price of doing business.

Hellerstein also rebutted Javice’s claim that she deserved a sentencing break for admitting she did something wrong.

“She said she made a mistake,” the judge said of her letter to him. “She doesn’t admit she committed a crime. I don’t think it’s an acceptance of responsibility.”

In Monday’s sentencing hearing, Sullivan praised Javice’s good deeds that “were not in the newspapers” and implored the judge to take them into consideration.

According to Sullivan — citing a sheaf of letters from family, friends, and acquaintances who wrote to support Javice — the Frank founder assisted seriously ill family members, quietly paid grocery bills for people who were struggling, and gave opportunities to people who are traditionally excluded from certain career paths.

“We think that that is more in line with what is fair for a woman who has done good for most of her life,” Sullivan said.

Near the end of the hearing Monday, Hellerstein permitted Javice to stay out of prison while she appeals her case, which her lawyers said would be done speedily. But he paused to ask whether Javice, a dual French-US citizen, might flee to escape her seven-year prison sentence.

“I intend to stay here and serve my sentence with dignity,” Javice told him.

The judge appeared assured by comments from her lawyers, who said that her personal ties were in the United States.

“I am convinced that she will not flee — that her life is here,” Hellerstein said.