Startup Founder Sentenced to Over Seven Years for $175 Million Fraud

Sat Oct 18 2025 08:01:08 GMT+0300 (Eastern European Summer Time)

Charlie Javice, the founder of the educational startup Frank, faces over seven years in prison after being convicted of defrauding JPMorgan Chase by inflating customer numbers and fraudulent practices.

Charlie Javice, a 33-year-old entrepreneur behind the startup Frank, was sentenced to more than seven years in prison for defrauding JPMorgan Chase of $175 million. She was found guilty of exaggerating her company's customer base from under 300,000 to over 4 million, leading to the successful acquisition by JPMorgan. Despite showing earlier philanthropic efforts, her actions during the acquisition were described as driven by greed. Prosecutors highlighted that this sentence serves as a warning against startup fraud, emphasizing its seriousness amidst a rising trend in such fraudulent practices.

NEW YORK (AP) — Charlie Javice, the founder of Frank, a startup aimed at improving student financial aid applications, was sentenced Monday to over seven years in federal prison for defrauding JPMorgan Chase of $175 million by vastly inflating her company's customer figures.

At the Manhattan federal court sentencing, Judge Alvin K. Hellerstein described the fraud as considerable, revealing how Javice falsely claimed that Frank had over 4 million customers while the actual number was less than 300,000. Her deception led to a massive payout from the banking giant in the summer of 2021.

Javice, 33, who has faced intense public scrutiny and professional fallout, drew comparisons to Elizabeth Holmes of Theranos fame. Her attorney argued that Javice's company genuinely provided valuable services, unlike Holmes’s failed enterprise.

Defense attorney Ronald Sullivan insisted that Javice is different from Holmes, stating that Frank had a functioning product, and highlighted the bank's eagerness to acquire Frank due to competition, implying JPMorgan lacked adequate due diligence.

In contrast, prosecutor Micah Fergenson argued that JPMorgan acquired what he termed a “crime scene” instead of a healthy business. Prosecutors emphasized that Javice’s actions were motivated by the lure of wealth, as she stood to gain $29 million from the sale of her firm.

During her sentencing, Javice expressed deep remorse, stating that she was haunted by her actions. She apologized to all affected by her decisions, including her family, employees, and the bank's shareholders, while acknowledging that her choice would carry lifelong repercussions.

The case follows a troubling trend of startup founders engaging in fraudulent behavior, prompting discussions on the need for stricter repercussions for corporate deceit surrounding company valuations.