Prosecutor Details Fraud in $175 Million JPMorgan Sale Trial

NEW YORK — A Florida woman allegedly committed a “brazen fraud” when she sold her student aid startup, Frank, to JPMorgan Chase & Co. for $175 million, a prosecutor told jurors on Wednesday during closing arguments at a criminal trial.

Assistant U.S. Attorney Nicholas Chiuchiolo urged the jury in Manhattan federal court to convict Charlie Javice, 32, and a former executive of her company for exaggerating the company’s customer base prior to the sale. Chiuchiolo claimed that fraudulently inflating the number of clients was central to securing the lucrative buyout.

“The evidence will show that the defendants repeatedly lied to JPMorgan in the summer of 2021,” Chiuchiolo said, explaining that Javice claimed Frank had over 4.25 million clients, while evidence pointed to an actual customer base of approximately 400,000.

Defense attorney Jose Baez presented a contrasting view, urging the jury to acquit Javice on grounds that the government’s case was “incredibly flawed.” Baez highlighted various inconsistencies and questioned the evidence presented by the prosecution.

As Baez spoke, Javice maintained a confident posture, smiling at moments and adjusting her chair to face the jury directly.

“They are going to call him a liar,” Chiuchiolo predicted regarding testimonies from employees who resisted Javice’s demands to create fake data validating the inflated customer claims. The prosecutor described an incident where Javice sought help from her engineering chief to generate “synthetic data” but was refused.

As the investigation unfolded, prosecutors revealed that Javice hired a data scientist for $105,000 to fabricate a customer data set indicating more than 4.2 million users.

Javice, who was released on bail throughout the trial, did not take the witness stand during the five-week proceedings. The prosecution’s closing arguments set the stage for jury deliberations expected to begin on Thursday.

“If you believe the evidence from the prosecution, it becomes clear: the defendants are guilty,” Chiuchiolo asserted.