She's Accused of Duping JPMorgan. Somehow, the Bank Is Feeling the Heat.

JPMorgan Chase Bought Frank in the Summer of 2021, a Few Weeks After Javice First Met With CEO Jamie Dimon

- Alexander Saeedy

One week before she sold her startup to JPMorgan Chase for $175 million, Charlie Javice asked an employee to help create a list of four million users—more than 10 times as many accounts as the company actually had. When the employee refused, he says, Javice sought to reassure him.

"She said: 'Don't worry. I don't want to end up in an orange jumpsuit,'" Patrick Vovor testified this month.

In a trial that began Feb. 18 in a Manhattan federal courthouse, Javice and another executive stand accused of defrauding the bank of tens of millions of dollars. If convicted, the two face the prospect of decades in prison.

Looming over the proceedings is a weighty question: How was one of the world's most powerful financial institutions hoodwinked into spending so much money on a small-time startup whose founder had practically no record in finance?

The startup, called Frank, helped students get access to financial aid. The bank saw in its ranks of college-aged users a gold mine: millions of future young professionals who could be converted early in their lives into loyal customers for banking, credit cards and other financial services.

JPMorgan Chase bought the startup in the summer of 2021, a few weeks after Javice first met with the bank's chief executive, Jamie Dimon. Months later, JPMorgan learned that the number of people with Frank accounts was actually closer to 300,000 than to the four million Javice purported to have, according to court testimony from executives. The bank sued in December 2022, and then federal agents arrested Frank's founder at Newark airport the following April.

Who is Charlie Javice?