Charlie Javice, the 33-year-old entrepreneur who once promised to revolutionize college financial-aid applications, tearfully apologized to JPMorgan Chase, its shareholders, her friends and family, and former employees of her startup, Frank, as she was sentenced to just over seven years in prison on Monday for orchestrating a $175 million fraud.
“Not a day passes that I do not feel profound remorse,” Javice said through tears before U.S. District Judge Alvin Hellerstein in Manhattan federal court. Standing to address the court, she said she was “haunted that my failure has transformed something meaningful into something infamous” and admitted to making “a choice that I will spend my entire life regretting.”
The sentencing marks a dramatic fall from grace for Javice, who once graced the Forbes “30 Under 30” list in 2019 and was celebrated as a rising star in financial technology. Her startup Frank, founded in 2017, was designed to simplify the complex process of filling out the Free Application for Federal Student Aid (FAFSA) for college students seeking financial assistance.
JPMorgan Chase acquired Frank in September 2021 for $175 million, believing the platform served more than 4 million students across 6,000 higher education institutions. However, prosecutors proved that Javice had fabricated the vast majority of those customers, with the actual number being fewer than 300,000.
The deception unraveled when JPMorgan attempted to market its banking products to Frank’s supposed customer base. When the bank sent marketing emails to 400,000 purported Frank customers, approximately 70% bounced back as undeliverable. The bank’s investigation revealed that Javice had enlisted the help of a data science professor, paying him $18,000 to create fake customer data.
During the six-week trial that concluded in March, federal prosecutors described Javice’s actions as driven by “personal greed and ambition.” She was convicted on all four counts: bank fraud, securities fraud, wire fraud, and conspiracy. Prosecutors had sought a 12-year sentence, while her defense team requested just 18 months.
In her emotional courtroom statement, Javice directly apologized to multiple constituencies affected by her fraud. “I am seeking forgiveness from the shareholders of JPMorgan Chase. To every employee or investor of Frank who has been affected by my actions, I ask for your forgiveness. To every student or family that relied on Frank, I ask for your forgiveness,” she said.
Judge Hellerstein acknowledged Javice’s tearful words as “very moving” but emphasized his duty to uphold market integrity. “Markets require honesty. It’s biblical. Your actions were not honest,” he told her. While describing her as “a good person” who had “done a bad thing,” he sentenced her to 85 months in prison and three years of supervised release, and ordered her to pay $287.5 million in restitution plus $22.4 million in forfeiture.
The judge also criticized JPMorgan’s due diligence process, saying, “They have a lot to blame themselves [for],” in failing to adequately verify Frank’s customer claims. However, he clarified that he was “punishing her conduct and not JPMorgan’s stupidity.”
Frank’s background adds poignancy to the case’s outcome. Javice founded the company at age 24 with a mission to reduce student debt and make financial aid more accessible. The platform was free to use but offered premium services including access to financial advisors and cash advances of up to $5,000 while students awaited aid approval.
JPMorgan CEO Jamie Dimon has called the Frank acquisition a “huge mistake.” The bank shut down Frank’s website in January 2023, just over a year after the acquisition.
Javice’s codefendant, Olivier Amar, Frank’s former chief growth officer, was also convicted on the same charges and awaits sentencing on Oct. 20. Both defendants are expected to appeal their convictions.
The case draws parallels to other high-profile tech fraud cases, particularly that of Theranos founder Elizabeth Holmes, though Javice’s defense team argued her product actually functioned, unlike Holmes’s blood-testing technology.
Javice will remain free during her appeals process, with Judge Hellerstein citing her fertility treatments and desire to start a family as factors in allowing her to delay reporting to prison. She has enlisted prominent appellate attorney Alexandra Shapiro, who also represents Sean “Diddy” Combs and FTX founder Sam Bankman-Fried.
For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.
