Charlie Javice was once celebrated as a promising young entrepreneur. After all, she was only 17 years old when, in spring 2009, she met with Howard Finkelstein, an attorney who advises startups, at an event hosted by New York University.
Javice was there to network for her new startup, PoverUp, a platform to help students launch microfinance clubs.
“She could start conversations with anyone and continue endlessly,” Finkelstein told former Fortune finance reporter Luisa Beltran. But Javice was so young at the time Finkelstein required her to have a parent’s permission in order to advise her. In addition to her entrepreneurial goals, she wanted to start a worldwide organization to help people get out of poverty.
“Yeah, she wanted to change the world,” Finkelstein told Fortune.
But Javice changed the world in quite a different way. In March, a Manhattan federal court convicted the now-33-year-old of defrauding JPMorgan Chase into buying her student-loan startup, Frank, for $175 million. On Monday, she was sentenced to seven years in prison.
‘Biblical’ crime
Judge Alvin Hellerstein said Javice’s crime was “biblical.”
“Among the many commandments in the Bible are the commandments of just weights and measures,” the judge said. “Yours was not a just weight and measure.”
Javice had falsely claimed Frank had more than 4 million users, when in reality it had just about 300,000. The massive inflation of consumer data was integral in JPMorgan’s agreeing to buy the company in 2021, a deal its CEO, Jamie Dimon, called a “huge mistake.”
To convince JPMorgan of her fabricated customer base, Javice allegedly hired a data scientist to create a synthetic customer list to back up her false claims. But JPMorgan discovered the fraud when its marketing emails to JPMorgan users had extremely low delivery and open rates. The bank ultimately sued Javice, triggering federal criminal and securities fraud charges, which culminated in a six-week jury trial in New York and her conviction and sentencing.
During the trial, prosecutor Nicholas Chiuchiolo told jurors Javice and codefendant Olivier Amar, Frank’s chief growth officer, had “time and again” pitched the business falsely and sold Frank for $175 million “worth of lies.” He argued Javice and Amar became multimillionaires while “JPMorgan got a spreadsheet with fake names.”
A high school classmate of Javice’s told Fortune’s Beltran she was bewildered that a young businesswoman could swindle the world’s largest bank.
“How can she think she could get away with this? How did she even sleep?” the classmate wondered.
Although Javice’s high-stakes case has been compared to that of Elizabeth Holmes and Theranos, whose fraudulent technology endangered lives, the judge at her sentencing emphasized Javice’s crimes caused substantial financial and reputational damage to JPMorgan. Holmes is serving an 11-year prison sentence at Federal Prison Camp Bryan, a minimum security camp in Texas.
Gregory Coleman, the retired FBI special agent who brought down the real-life “Wolf of Wall Street,” told Fortune’s Beltran he thought Javice was similar to Holmes in some, but not all, ways. Coleman said Holmes’s testimony showed psychopathic tendencies.
“Some might argue that having a baby on the eve of her trial, knowing that if convicted she could face significant jail time, was just the latest in a long line of selfish, manipulative, psychopathic acts,” he said. Meanwhile, Coleman said Javice appeared to be more aware she was making overstated claims that just snowballed into outright lies.
“I don’t believe that she set out from the beginning to commit fraud, but rather was drawn in and undone by her poor decisions in her attempt to ‘fake it until she makes it,’” Coleman told Fortune’s Beltran.
During her sentencing, Javice appeared remorseful, according to several reports.
“At 28 I did something that runs against the grain of my upbringing,” Javice said. “I made choices that I will spend my entire life regretting.”
Read more about Charlie Javice in this “unauthorized profile.”
