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The alleged close relationship with JPMorgan Chase's prosecutor has become a key focus on the defense strategy of young entrepreneur Charlie Javice, and is set to go to trial for criminal charges this week, with US Bank saying she's hoping to have her company. I fraudulently led to purchase.
Javice's defense team maintained that lenders essentially felt buyer regret, misusing the government to turn commercial disputes into criminal cases. Two years ago, Javice, 31, was arrested two years ago on fraud charges over Frank's $175 million sale to JPMorgan in 2021, helping a student applying for financial aid.
Her legal team accused JPMorgan of having great power over prosecutors in the investigation, claiming that such adjustments predated the bank's own lawsuit against Javice for fraud.
“The government worked closely with JPMC despite the reputational interests of the bank in its acquisition results,” Havis' team complained last month.
In submitting the rebuttal, the prosecution allegedly “conducted an extensive independent investigation into allegations in the case,” accusing Havis' team of alleging “demonstration of government misconduct.”
New York prosecutors say they have been saying that Javis, Frank's former chief growth officer, and her co-defendant, Olivier Amar, will show 45 million users when Frank's actual figures were 90% lower. They accuse the data scientist of paying for manufacturing the account. The trial is scheduled to begin on February 18th.
Amar's lawyer, who denied all misconduct, did not respond to requests for comment.
“There's a lot of hard defense and some surprises,” said a spokesman for Havis' legal team, led by Jose Baez, who previously represented Harvey Weinstein.
“Do a Google search and focus on the July 2021 time frame. Find around 20 articles of all kinds about Frank and Charlie talking about hundreds of thousands of signed up users. I think so. It was in public.”
Javice's defense could depend on the distinction between how students are defined as “signing up.” BusinessInsider reported that in July 2021, Frank told a publication that “serves over 5 million households.”
The incident takes away one of the most embarrassing episodes in recent JPMorgan history – the transaction was insignificant for a bank that made nearly $600 billion in profits last year. I labeled it as a “big mistake.”
It also attracted attention from the charismatic founders who promised revolutionary business following the famous fraud trials of Elizabeth Holmes, Sam Bankman Freed and Trevor Milton. All were later convicted and sentenced to several years in prison.
Prosecutors found that the text between Javice and Amar discusses the conviction of Holmes, the founder of blood collection company Theranos. Havis wrote to Amar of Holmes: “Hopefully that's a light ruling. Investors should be criticized for allowing a 19-year-old villain.”
Havis became known as Frank in 2017, four years after graduating from the University of Pennsylvania, and later became known as Frank. This website provided helping university students apply for financial aid.
Frank eventually raised money from Israeli venture capital firm Aleph and Penn alumnus billionaire investor Mark Rowan at Apollo Global Management. Javice appeared on the podcast to promote Frank for the families of middle-income people trying to send their children to college.
JP Morgan asked Frank about his relationship with young Americans who could sell banking products. Prosecutors argued that they had implemented a scheme to make Javice appear to have more important masses to seduce potential acquirers.
Investment bank Lion Tree held an auction for Frank in 2021 amid inflated public and private market valuations. JPMorgan executives have shown that the company's ratings are supported by Frank users, who have come to believe in JPMorgan by millions.
“What we are buying is teams, brands, algorithms, and the lack of millions of customer relationships deserves a small portion of the purchase price,” the bank assigned to Frank.
JPMorgan paid Javice $21 million for Frankstake and offered him a $20 million retention bonus that he had never been paid.
Since her arrest in April 2023, Javice has been free on $2 million bail secured against her Miami apartment. The court approved her request to remove ankle monitors so that she could pursue her job as a fitness instructor.
JPMorgan has filed another civil lawsuit against Javice. The trial is expected to last for four weeks.
