By Luc Cohen and Tatiana Bautzer
NEW YORK (Reuters) -Entrepreneur Charlie Javice was convicted on Friday of defrauding JPMorgan Chase into buying her college financial aid startup Frank for $175 million in July 2021.
Javice and co-defendant Olivier Amar, who was Frank’s chief growth officer, were each convicted on all four counts they faced: securities fraud, wire fraud, bank fraud and conspiracy.
The verdict followed a five-week trial in Manhattan federal court before U.S. District Judge Alvin Hellerstein.
Javice showed no emotion as the verdict was read.
The judge scheduled Amar’s sentencing for July 23 and Javice’s for August 26. They each could face decades in prison, though Hellerstein has broad discretion in determining their punishment.
Javice studied at the University of Pennsylvania’s Wharton School and founded Frank in 2017.
She appeared on Forbes magazine’s “30 Under 30” list in 2019, drawing media praise for simplifying college financial aid for students and parents.
But JPMorgan sued her in December 2022, saying she lied about Frank’s customer base. The Manhattan U.S. Attorney’s office brought criminal charges four months later.
Prosecutors accused Javice of falsely assuring the largest U.S. bank that Frank had 4.25 million customers, not the 300,000 it actually had.
JPMorgan discovered the inflated number when it tried to contact customers it believed were real to sell products, and received far fewer responses than expected, prosecutors said.
Jamie Dimon, the bank’s longtime chief executive, has called the Frank acquisition a “huge mistake.”
A spokesperson for the bank declined to comment on the verdict.
Javice, now a Florida resident, and Amar pleaded not guilty. Neither testified at the trial.
Jose Baez, a lawyer for Javice, had told jurors that JPMorgan performed extensive due diligence and knew how many clients Frank had before completing the purchase, but complained due to “buyer’s remorse.”
Baez said JPMorgan claimed it was hoodwinked only when the bank wanted to get out of its contract with Frank because financial aid regulations changed, and that fraud was the only condition that allowed it to back out.
In her opening statement, prosecutor Rushmi Bhaskaran said Amar bought “sham lists” of student data from third parties, which he and Javice could pass off as customers to JPMorgan.
“It was through their lies that they became multimillionaires,” Bhaskaran said.
(Reporting by Tatiana Bautzer and Luc Cohen in New York; Additional reporting by Jonathan Stempel; Editing by Rod Nickel and Daniel Wallis)
