A young businessman accused of defrauding the largest US bank

The largest bank in the United States, JPMorgan Chase & Co., accuses Charlie Javice, a young businessman, of having tricked it into buying his start-up, creating millions of supposed customers for that.

In a lawsuit filed by the bank last month, the bank accuses the future chief executive – whose name was on the list of “hopeful under thirty” of forbes — of having engineered an elaborate scam aimed at greatly exaggerating the number of clients of his student-focused financial planning start-up Frank, which JPMorgan had acquired in September 2021.

Javice and the company’s former head of growth and acquisitions, Olivier Amar, are accused of having listed more than four million fake customers and of having deceived the team in charge of the preliminary audit by hiring a data professional to hide their actions. with the creation of millions of fake profiles on the platform.

Get our free daily issue by email so you don’t miss any of the best news Free Subscriptions!

“To get his money, Javice decided to lie, including about Frank’s successes, size and scope of market penetration,” the complaint states.

For their part, Janice’s lawyers have denied the allegations made against their client and have filed a complaint against JPMorgan, which they say is trying to avoid paying the money owed for the purchase of the company.

The young woman who just turned 30 founded Frank in 2016, when she was just 24 years old. With the stated goal of helping college students fill out their financial aid applications, thereby saving billions of dollars in tuition fees, Frank and its young founder captured the world’s attention.

But, according to JPMorgan, this success story it will have been excessively exaggerated, even a hoax. The bank said that instead of the 4.25 million students that Frank claimed to have in its client portfolio at the end of 2021, the start-up’s services were actually only claimed by only around 250,000.

According to an article in New York TimesJavice continued to enjoy positive coverage in the most important media and, in particular, in forbes, Fast Company Magazine, Average and Insiderdespite repeated warning signs.

The US Department of Education took notice of Frank shortly after its founding. Right at the beginning of its activities, the office offered financial assistance to university students with the aim of reducing their monthly fees through a website called frankfafsa.com.

FAFSA, which stands for “Free Application for Federal Student Aid,” was a registered trademark and was used by Frank without prior permission, the department said at the time. As part of a settlement made in 2018, Frank had returned the internet address to the department, taking an alternate address.

At that time, a co-founder of Frank, Adi Omesy, sued Javice, who is Jewish, for embezzlement in Israel. He had been compensated. This did not stop the media from continuing to be enthusiastic about the head of the company.

In 2018, the Business Insider published an article that claimed “the 26-year-old founder offers a solution to what Bill Gates calls ‘unnecessary roadblocks’ in college – and her startup is helping students cut thousands of dollars in tuition.”

In that article, Javice explained that Frank saves his clients an average of $28,000 in monthly fees.

However, in an article published by the same newspaper after the complaint filed by JPMorgan against Javice, the Business Insider quotes student aid expert Mark Kantrowitz, who says Frank is just making the process of filling out FAFSA forms easier for young applicants.

“Frank didn’t do anything to influence the amount of help – students would have received the same filling out the forms themselves,” says Kantrowitz. “The amount of financial aid could never be multiplied by two, whatever happens”.

He adds in the article that Frank delivered “random” numbers when the company had to present devices played by its users.

Javice’s close relationship with the media began in 2011, when the young woman appeared on the list of the 100 Most Creative People in the fast company for his role in a start-up called PoverUp.

Established as an NGO, Javice said, PoverUp’s goal was to provide loans to entrepreneurs in disadvantaged countries to help them lift themselves out of poverty using small contributions given by students.

But a survey ofInsider found no evidence of the start-up’s registration as an NGO. The agency also quoted a former member of the company’s board of directors as saying the company never got off the ground, contradicting Javice, who in 2013 said his company raised $300,000 in loans.

Javice quickly abandoned the idea and created Tapd, a company focused on connecting young people and job offers. through text.

The company was later renamed Frank after financial difficulties forced Javice to lay off his entire staff. However, the young woman managed to present the difficulties she went through as a richly instructive moment and as the structure that would eventually give birth to her son. success story.

In a 2020 email to an online magazine obtained byInsiderFrank’s PR manager called the company’s journey “miraculous”, noting that “Javice’s first start-up folded after 18 months” and that the latter managed to “convince investors to fund his next venture, Frank”.

Leave a Comment