Prosecutors Demand Stiff Sentence for Startup Founder Who Conned JPMorgan Out of $175 Million

The startup founder who conned JPMorgan Chase out of $175 million by inflating numbers to get the bank to buy her company, is asking for leniency ahead of sentencing.

But federal prosecutors in the Southern District of New York say no way. They wrote a letter to U.S. District Judge Alvin K. Hellerstein, asking that Charlie Javice receive a 12-year prison sentence for defrauding JPMorgan out of $175 million. 

In a filing, they say the now 33-year-old Javice was motivated by greed and deception as she doctored documents to get JPMorgan to buy her student loan platform Frank, in 2021.

"Only on the eve of her sentencing does Javice now claim that she accepts responsibility," wrote prosecutors in a letter to U.S. District Judge Alvin K. Hellerstein. "Her self-serving assertions ring hollow when measured against her conduct.”

Fraud Conviction

Javice and her second in command at Frank, Olivier Amar, were convicted in March of multiple charges including conspiracy to commit securities and wire fraud and separate charges of bank, wire, and securities fraud. 

Prosecutors say Javice lied about the size of Frank’s student loan customer base and created fake spreadsheets to trick the bank into buying her company, telling JPMorgan that she had more than four million clients. Frank had only about 300,000 customers. 

Prosecutors also say that when JPMorgan fired her in September 2022, she transferred funds from her checking and savings accounts to accounts in the names of newly established limited liability corporations, to hide some of the money she made off the deal. Prosecutors say the fraud allowed Javice to personally pocket $28 million. 

“Make no mistake, Javice was motivated by greed, and her greed continued after the fraud came to light,” wrote prosecutors. 

Pleas for Leniency

The letter from prosecutors comes after Javice’s legal team submitted a 300-page sentencing submission, arguing that she should serve no jail time and arguing that the fraud amounted to a drop in the bucket for the nation’s largest bank. 

That package also included a three-page letter from Javice to Judge Hellerstein pleading for no jail time, noting that she’s “truly sorry,” saying she was inspired to do good in the world by her grandmother who survived the Holocaust, she has aging parents, and time is running out for her to start a family. 

"Most painfully, I have lost time. At 29, I put my life on hold, including my hopes of becoming a young mother. While I still hope motherhood is in the cards for me, at this point I realize it is not guaranteed," she wrote.

Sentencing is set for September 29.