Founder sentenced to seven years in prison for fraudulent sale to JPMorgan
6 hours ago
- #JPMorgan
- #fraud
- #startup
- Charlie Javice, founder of Frank, sentenced to over seven years in prison for defrauding JPMorgan Chase of $175 million.
- Javice falsely claimed her company, Frank, had 4 million customers when it actually had fewer than 300,000.
- Judge Alvin K. Hellerstein criticized JPMorgan for inadequate due diligence but emphasized Javice's culpability.
- Javice's case compared to Elizabeth Holmes of Theranos, both involving fraudulent claims to investors.
- Frank was marketed as a tool to simplify financial aid applications, backed by venture capitalist Michael Eisenberg.
- Prosecutors argued Javice was motivated by greed, pocketing $29 million from the sale of her company.
- Javice's defense highlighted differences from Holmes, stating Frank's product worked unlike Theranos's non-functional technology.
- Prosecutors noted a trend of startup founders engaging in fraud to attract investors or buyers.