Charlie Javice was sentenced to 85 months in prison for defrauding the JPMorgan Chase & Co. in the acquisition of his student funding startup, Frank worth $ 175 million.
Federal Judge Alvin Hellelerstein issued the sentence on Monday at the Federal Court of Manhattan. Prosecutors had asked for a 12 -year sentence for Javice, 33, but the judge seemed to take into account testimonies about his good character.
“You are a good person,” said Hellerstein to Javice. “You did something wrong, and I have to punish it.” In addition to the prison time, he ordered her to lose $ 22.4 million.
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A New York jury condemned Javice in March, concluding that the former employee lied and falsified user data to deceive the largest bank in the country, making him believe that his site had more than 4.25 million users, when in fact there was less than 300,000.
“I am deeply sorry and I ask for forgiveness with all my heart,” said Javice, thrilled, before the sentence. “If I were within my reach, I would never make the same mistakes again, either for money, no recognition, or for nothing.” Family members present in the front row of the court also cried while she was talking.
Prosecutors asked for a rigorous sentence, calling the crime “blatant fraud” she committed to make Jpmorgan pay much more for the company than she really was worth in the September 2021 agreement. Javice’s lawyers suggested a sentence “in the 18 -month house”, claiming that her actions were an “isolated lapse of judgment” and that the loss was not “consequent” to a JPMorgan Bank.
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JPMorgan did not comment on the sentence. The bank processes Javice separately by the agreement with Frank.
Elite founders
Graduated from the University of Pennsylvania Wharton School, whose company has attracted investors such as Marclo Global Management CEO Javice is one of several young startup founders with fraud -condemned elite origins in recent years. The group includes FTX Sam Bankman-Fried and Theranos Elizabeth Holmes.
Rowan was one of many who wrote to Judge Hellerstein asking Javice for mercy. In a letter sent earlier this month, the private equity executive asked the judge to consider his “complete character”, marked by passion, creativity, intelligence and empathy.
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“I believe she will make a lot of significant contributions to society going forward,” wrote Rowan, who joined Frank’s advice and also witnessed as a defense in Javice’s trial.
Frank, which JPMorgan closed in early 2023, offered a tool to help students fill the Free Application for Federal Student AID (FAFSA), required by most colleges for financial assistance decisions.
“Synthetic” users
JPMorgan executives witnessed at the trial that hoped to earn millions of new young clients with the Frank agreement, which made Javice Director-Managing and Chief of Student Solutions at the Bank. But the bank started an internal investigation after an email campaign for Frank users generate only 10 new current accounts, they said.
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Jurors heard a data scientist that Javice paid $ 18,000 to create “synthetic” user data to provide JPMorgan during negotiations. Frank’s chief engineer testified that he refused to create this data because he feared it was illegal.
Javice’s defense tried to focus on the faults and in a hurry of the JPMorgan due diligence. It also suggested that the bank did not really care about Frank’s user numbers, but to buy the company before another bank.
An JPMorgan executive witnessed that the bank mistakenly believed Bank of America was also competing for Frank. In fact, the capital One withdrew a $ 125 million offer on the same day JPMorgan made its proposal due to regulatory, marketing and technological concerns.
“The stupidity of JPMorgan“
On Monday, one of Javice’s lawyers, Ronald Sullivan, suggested that Jpmorgan’s failures should be considered in the “context” of the sentence. But Hellerstein indicated that he would not take into account the “very poor Due Diligence of JPMorgan.”
“Fraud is fraud, whether you are smarter than someone smart or a fool,” said the judge, adding that he was focused on “in her conduct, not the stupidity of JPMorgan.”
Javice was sentenced along with Frank’s former director of growth, Olivier Amar, who will be sentenced next month.
During the trial, the lawyers to love tried to distance him from Javice, pointing out that he did not participate in many conversations she had. Javice asked to be tried separately, but Hellelerstein denied the request.
Javice indicated that the judge’s refusal to separate his trial from the de Amar will be one of the points raised in his appeal. In judicial documents requesting provisional freedom while challenging the conviction, his appeal lawyer, Alexandra Shapiro, said that his client did not have a fair trial for facing “two promoters”, love and the government.
Shapiro said that Javice will also contest the judge’s decisions about evidence and instructions to the jury.
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