Charlie Javice Sentenced To 7 Years In Prison For Fraudulent Sale of Her Startup To JPMorgan

Charlie Javice, founder of college financial-aid startup Frank, was sentenced to over seven years in prison for defrauding JPMorgan by inflating user numbers before the bank's $175 million acquisition. CNN reports: Javice, 33, was convicted in March of duping the banking giant when it bought her company, called Frank, in the summer of 2021. She made false records that made it seem like Frank had over 4 million customers when it had fewer than 300,000. Addressing the court before she was sentenced, Javice, who was in her mid-20s when she founded the company, said she was 'haunted that my failure has transformed something meaningful into something infamous.' Sometimes speaking through tears, she said she 'made a choice that I will spend my entire life regretting.'

Judge Alvin K. Hellerstein largely dismissed arguments by Javice's lawyer, Ronald Sullivan, that he should be lenient because the negotiations that led to Frank's sale pitted 'a 28-year-old versus 300 investment bankers from the largest bank in the world.' Still, the judge criticized the bank, saying 'they have a lot to blame themselves' for after failing to do adequate due diligence. He quickly added, though, that he was 'punishing her conduct and not JPMorgan's stupidity.' Javice was among a number of young tech executives who vaulted to fame with supposedly disruptive or transformative companies, only to see them collapse amid questions about whether they had engaged in puffery and fraud while dealing with investors.

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