BY Fast Company 3 MINUTE READ

JPMorgan Chase has taken down the website for a student-aid platform it acquired two years ago for $175 million after accusing the founder of widespread fraud. The financial giant claims it was sold a “lie” by fintech startup Frank, and is suing 30-year-old founder Charlie Javice and other former executives for reportedly lying about how successful the company was, namely by creating a massive database of fake users to fool the bank when it asked for proof.

JPMorgan made that whopping nine-figure investment in Frank—described by Javice as “Amazon for higher education”—in 2021 after the startup had already attracted support from billionaire Marc Rowan and a range of others, including VC firm Aleph, edtech investor Reach Capital, and homework-helper app maker Chegg. At the time, Javice boasted about the JPMorgan deal on LinkedIn, writing that Frank was already “serving over 5 million students at over 6,000 colleges.”

To bamboozle JPMorgan, its lawyers argue in a lawsuit filed last month in federal court, Javice lied “about Frank’s success, Frank’s size, and the depth of Frank’s market penetration.” Javice “represented in documents placed in the acquisition data room, in pitch materials, and through verbal presentations [that] more than 4.25 million students had created Frank accounts to begin applying for federal student aid using Frank’s application tool.”

JPMorgan claims in its suit that it learned the truth about Frank only after sending emails to about 400,000 customers, the overwhelming majority of which bounced back. Instead of getting a business with 4 million clients, JPMorgan learned months later that it had gotten stuck with one with “fewer than 300,000 customers,” the bank’s lawsuit contends.

Javice is accused of hiring a data scientist to invent fake accounts, giving the impression during JPMorgan’s due diligence process that Frank’s customer base contained more people than the city of Los Angeles—when in reality, it was smaller than Lexington, Kentucky. Javice’s roster allegedly contained “a list of names, addresses, dates of birth, and other personal information for 4.265 million “students” who did not actually exist.” The bank claims Javice initially fought its request to provide customer metrics, arguing that sharing such a list raised “privacy concerns.” After the bank’s team insisted, Javice “chose to invent several million Frank customer accounts out of whole cloth.”

The suit includes screenshots of Javice’s presentations where she depicted Frank’s growth, showing more than 4 million customers.

Alex Spiro, a lawyer representing Javice, is calling JPMorgan’s lawsuit “nothing but a cover.” He painted a different set of events for the Wall Street Journal: “After JPM rushed to acquire Charlie’s rocketship business, JPM realized they couldn’t work around existing student privacy laws, committed misconduct, and then tried to retrade the deal. Charlie blew the whistle and then sued.”

Whatever the case here, JPMorgan, America’s largest banking institution, will emerge blemished, partly because fintech is facing renewed scrutiny after being hobbled by a series of scandals that, with more vigilance, perhaps could’ve been prevented. In its 2021 press release, JPMorgan defended buying Frank by saying the purchase was giving it the “fastest-growing college financial-planning platform,” and offered a direct line into millions of young people and networks at thousands of educational institutions.

Unlike other alleged 30-something scammers of late—such as Sam Bankman-Fried or the crypto-heist duo Razzlekhan and Dutch—Javice isn’t a walking big red flag, rapping that she’s going to “spearphish your password / all your funds transferred,” or being described as a “straight-up sociopath.” She made the Forbes 30 Under 30 list in 2019, and nearly a decade before that, as a 19-year-old UPenn sophomore who’d designed a digital platform to teach students about micro-finance, she was included on Fast Company‘s own Most Creative People list. (Javice also contributed in more recent years to the Fast Company website.)

But in the years immediately before JPMorgan’s deal, Congress actually did raise some flags. In 2020, four U.S. House members thought something smelled funny at Frank and asked the Federal Trade Commission (FTC) to investigate. “We . . . suspect that the company may be using the data collected from misled students to make a profit by selling data to third-party advertisers,” the letter read, adding that Frank’s application tool “does not make it any easier for students to get relief funds, and appears instead to be a way for Frank to mine and exploit students’ data for profit.”

The FTC sent a warning letter, giving Frank 10 days to address a number of “potentially misleading claims” that FTC agents had identified on the website (which now simply reads: “Frank is no longer available. To file your Free Application for Federal Student Aid (FAFSA), visit”).

Javice and her lawyer contend that another reason JPMorgan fired her was to avoid paying $28 million that she’s still owed from the deal. They’ve filed a separate lawsuit against JPMorgan, demanding it cover the legal bills she’s incurred during all of the bank’s internal investigations.


Fast Company