This ex CEO, 30, allegedly fooled JPMorgan into buying her startup for $175 million

JPMorgan Chase is now seeking damages from Charlie Javice and “Frank” is now shuttered. (Image: mrmaiko/Twitter)

JPMorgan Chase is suing an entrepreneur and former CEO for allegedly fabricating data to con investors into buying her education startup.

30-year-old Charlie Javice sold her startup “Frank” for $175 million to the US financial company in 2021, five years after the Ivy league graduate founded the company that helped students apply for financial aid in college.

Javice was appointed as a managing director at JPMorgan overseeing student-focused products after the acquisition of “Frank”. She and her former company’s chief growth officer Olivier Amar, also named in the lawsuit, both reportedly received $26 million in the deal “they would not have have received but for their misconduct,” JPMorgan said.

Then the problems cropped up. Javice had claimed “Frank” had over 4 million customers, leading JPMorgan Chase to make the expensive acquisition. Now, the company says, that after the purchase, they realized something might be amiss when it sent out a marketing test campaign to Frank's customer list. That’s when they uncovered the shocking revelation.

The 4 million customers, which Javice had allegedly refused to share the data of due to “privacy reasons”, were apparently all fake and fabricated. Javice had reportedly gone to a New York-area data scientist to forge a 4.26 million fake customers’ accounts and paid him $18,000, the lawsuit states. The total number of actual customers “Frank” had was fewer than 3,00,000 – a massively low number from the 4 million that was disclosed.

JPMorgan Chase also tracked emails, chats and messages between Javice, the data science professor and Frank's chief growth officer Amar, which the suit claims revealed the issues with the company.

Alex Spiro, Javice’s attorney, denied the allegations in a statement to CBS MoneyWatch. JPMorgan "knows what they filed is retaliatory and misleading," he said. He called the bank’s suit “nothing but a cover”, Bloomberg reported.

The US Congress members in 2020 too had expressed concern over Frank’s “deceptive practices” and issued a temporary restraining order. Javice has also been on Forbes' 30 under 30 list - that has included FTX's Sam Bankman-Fried and Theranos founder Elizabeth Holmes before.

JPMorgan Chase is now seeking damages from Charlie Javice and “Frank” is now shuttered.