Latest news with #CharlieJavice
Yahoo
21-04-2025
- Business
- Yahoo
This 32-year-old Pilates instructor told ‘lies' that duped JPMorgan out of $175M. Here's how she did it
Charlie Javice was the young, charismatic founder behind Frank, a fintech startup that promised to revolutionize the then-daunting student financial aid process. Javice's bold vision to simplify the Free Application for Federal Student Aid (FAFSA) gained recognition, landing her on Forbes' prestigious "30 Under 30" list. More media attention — and investor interest — weren't far behind. I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how Enter banking giant JPMorgan Chase, which hoped to leverage Frank's alleged massive user base of more than 4 million students to gain a stronger foothold in the lucrative student finance market. The bank's decision to pay $175 million appeared justified given the growth and scale touted by Javice. But beneath Javice's business model, prosecutors alleged, were fake user accounts and falsified data. Undetected during JPMorgan's due diligence process, the strategy eventually unraveled into one of Wall Street's most dramatic fraud scandals, drawing parallels to the fraud case of disgraced Theranos leader Elizabeth Holmes. In late March federal jurors convicted Javice of fraud and conspiracy, setting the stage for possible decades-long prison sentences for Javice and her co-defendant, Olivier Amar. At a recent bail hearing, Javice's lawyer attempted to argue that wearing an ankle monitor would prevent Javice from doing her current job: teaching Pilates in South Florida. How exactly did Javice manage to deceive a financial powerhouse like JPMorgan? And what crucial lessons can investors take from the company's mistakes? Charlie Javice founded Frank in 2016, promoting it as a cutting-edge platform that would simplify the process of applying for federal student aid. By digitizing and streamlining FAFSA, Frank promised students easier access to financial support, dramatically reducing paperwork and bureaucratic hurdles. Javice projected confidence, ambition, and youthful innovation, quickly positioning Frank as an indispensable tool for college-bound students nationwide. By 2019, Javice had been widely celebrated for her entrepreneurship and ability to attract venture capital. Her portrayal of Frank as a major success story, boasting millions of active users, secured her credibility in financial circles. In reality, Frank's actual customer base was less than 10% less than the company had publicly boasted of. When JPMorgan expressed interest in acquiring Frank, Javice sensed an opportunity to capitalize on the bank's appetite for growth. She reportedly paid a data scientist $18,000 to generate millions of fake user profiles, complete with realistic personal information, to substantiate her exaggerated user claims. Testimony revealed JPMorgan officials never checked if the users were real. Read more: The US stock market's 'fear gauge' has exploded — but this 1 'shockproof' asset is up 14% and helping American retirees stay calm. Here's how to own it ASAP Jamie Dimon, JPMorgan's longtime CEO, would later call the acquisition of Javice's company a "huge mistake." So how did a banking titan fail to uncover such blatant fraud during its acquisition process? JPMorgan appeared to rely heavily on data presented by Javice and her team, failing to independently corroborate the legitimacy of Frank's purported user base through external audits or third-party verification. The deception only came to light when JPMorgan attempted to leverage Frank's user base, eventually learning after a subsequent internal investigation that the bank had been manipulated. In December 2022, JPMorgan took legal action, filing a lawsuit against Javice for defrauding the company. The U.S. Department of Justice soon followed, charging Javice with wire fraud, bank fraud, securities fraud, and conspiracy. 'It was through their lies that (Javice and Amar) became multimillionaires,' federal prosecutor Rushmi Bhaskaran said during the trial. Javice's defense attorney, Jose Baez, claimed JPMorgan was fully aware of the accurate user figures, suggesting the bank had simply experienced buyer's remorse due to subsequent regulatory changes affecting the fintech sector. But the jury was unconvinced, leading to Javice's guilty verdict on all counts, and she now faces up to 30 years in prison. Javice's elaborate fraud highlights essential lessons for all investors, from major financial institutions to individual retail investors. Protecting funds against similar scams requires diligent skepticism, rigorous verification and proactive risk management. Investors must prioritize independent verification of any data provided during acquisitions or funding rounds. Relying solely on company-provided information is insufficient; third-party audits, external validations and comprehensive cross-checking of user data are essential. Understanding the nuances of a company's business model, revenue streams, and customer acquisition methods can help reveal underlying red flags. Investors should also be wary of hype-driven valuations and high-profile media endorsements. Accolades, like those Javice received from Forbes (though the publication later put Javice in its 'Hall of Shame'), can create a false sense of security. Instead, rigorous analysis of financial fundamentals and operational transparency should guide investment decisions. Regulatory tools, such as the SEC's EDGAR database and FINRA's BrokerCheck, offer valuable insights into corporate transparency and leadership backgrounds. Engaging trusted financial and legal advisors also adds necessary layers of due diligence and can help investors avoid costly oversights. Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Sign in to access your portfolio
Yahoo
08-04-2025
- Business
- Yahoo
Judge gives Charlie Javice lawyers a warning after they rattled jurors by asking about deliberations
Lawyers for fintech fraudster Charlie Javice have been seeking post-verdict interviews with jurors. Several "have expressed concerns and discomfort" over these inquiries, the judge told the lawyers. A new court filing reveals the judge sternly warned her lawyers to keep their conduct professional. Lawyers for fintech entrepreneur Charlie Javice have been seeking post-verdict interviews with the federal jurors who convicted her of fraud in Manhattan last week — leaving one so rattled that they reached out to the US Marshal Service to complain. "Several jurors have expressed concerns and discomfort from efforts by the defense attorneys to contact them and inquire about jury deliberations," the trial judge wrote to the defense team, revealing the jurors' concerns in a sternly worded warning letter. Signed by US District Judge Alvin Hellerstein, the one-page letter was sent to the defense team ten days after Javice was found guilty of tricking JPMorgan Chase into spending $175 million for her student financial aid startup, Frank. The letter was made public the next day, on Tuesday. In it, Hellerstein notes that "post-trial communications and contact with jurors are permissible after the jury has been discharged." He then orders the defense team and anyone working for them to follow New York state's rules for the professional conduct of attorneys. The rules bar attorneys from contacting discharged jurors under certain circumstances, including if the juror has made clear they do not want to communicate with the lawyer and if the lawyer's communication involves "misrepresentation, coercion, duress or harassment." Lawyers who violate the rules of conduct can face disciplinary action, including a judge's reprimand, and, in extreme cases, the suspension or loss of one's license to practice law. Defense attorneys and a representative for Javice did not immediately respond to Business Insider's inquiries about the letter. Javice, 33, remains free on $2 million bail pending a sentencing scheduled for August 26. Her codefendant, Olivier Amar, is scheduled for sentencing on July 23. Their fraud and conspiracy convictions carry a potential maximum sentence of 30 years in federal prison. Both have been fitted with ankle monitors — over their strenuous objections — while they remain free pending sentencing. Both are continuing to fight the requirement that they wear the bulky accessory. Lawyers for Javice have argued that wearing a monitor makes it "impossible" for her to teach Pilates in her home city of Miami Beach. "To have your legs in the air and the monitor going up and down on your leg — it is a significant encumbrance," her attorney, Ron Sullivan, told the judge during arguments last week. An attorney for Amar argued that wearing a monitor "makes him a pariah." The judge expressed concerns that both defendants have citizenship in countries that do not extradite — Javice is a dual US and French citizen — and said last week that he would issue a ruling at a later date. Read the original article on Business Insider
New York Times
03-04-2025
- Entertainment
- New York Times
How Will She Teach Pilates in an Ankle Monitor?
A striking and headline-making fraud case resulted in a conviction last Friday, when Charlie Javice was found guilty in federal court of conning JPMorgan Chase out of $175 million. The bank has also sued Ms. Javice, a 32-year-old entrepreneur who once made the Forbes 30 Under 30 list, for elaborately falsifying her student-finance start-up's customer list. But in a Manhattan courthouse hearing this week, the deliberations about Ms. Javice's bail terms turned into an absurdist episode, as her legal team argued that an order for her to wear an ankle monitor would hinder her ability to teach Pilates. Her lawyer, Ronald Sullivan, who did not immediately respond to a request for comment on the proceedings, stood at a podium and waved his arms to demonstrate the physicality needed to practice Pilates, which Ms. Javice teaches professionally in South Florida, sometimes leading three to four classes a day. 'To have your legs in the air and the monitor going up and down on your leg, it is a significant encumbrance,' Mr. Sullivan said, also noting that the monitor 'would remove the possibility of the one thing she can now do, which is teach her classes.' The hearing's focus on the bulky surveillance device was another case of ankle monitors taking space within the news and pop culture sphere. Anna Delvey, the fake heiress convicted of theft and larceny, wore a bedazzled ankle monitor on 'Dancing With the Stars' last year, and an ankle monitor appears regularly in the medical drama 'The Pitt,' worn by a resident named Cassie McKay, who drilled through hers in a recent episode to halt its blaring alarm. For Ms. Javice and her legal team, the issue centered on her inability to earn money while wearing the monitor, with little if any acknowledgment that other, less physically demanding jobs were an option. In a court filing, her lawyers argued that: 'Ms. Javice specializes in fitness instruction that requires demanding physical movement and full flexibility and range of motion, specifically around her feet and ankles. Indeed, Ms. Javice's supervisor reports that Ms. Javice's services are sought after because her instruction is particularly challenging and dynamic.' Wearing a Moncler coat, leggings and black flats, Ms. Javice sat quietly through the hearing. Judge Alvin K. Hellerstein of Federal District Court in Manhattan, who has presided over high-profile cases such as the Harvey Weinstein trial and the tax fraud trial of the art dealer Mary Boone, took time to weigh in on the matter. 'It's not heavy, it probably weighs a pound,' Judge Hellerstein said of the monitor. 'So I don't know,' he continued. 'I accept what you say, that it's a restriction on her ability to do the advanced Pilates that she does.' But, he noted, 'I can't say there is no risk of flight.' About an hour of arguments on the matter ensued, featuring court exhibits depicting Ms. Javice teaching Pilates. At one point, she huddled with her lawyers away from the microphone and podium, demonstrating with her arms. And during his retreat to chambers, Judge Hellerstein brought with him printouts of photos of Ms. Javice exercising to help him mull things over. Ms. Javice embraced her co-defendant, Olivier Amar, for several seconds before the hearing began and helped him adjust something on the lapel of his suit. Mr. Amar, who sat between his lawyers during the proceedings, was an executive at Ms. Javice's student-finance start-up, Frank, and was also ordered to wear an ankle monitor. His lawyers contested that the device was unsightly and 'makes him a pariah.' In a court filing, the acting U.S. attorney in Manhattan, Matthew Podolsky, wrote that 'the defendants' current bail packages are not sufficient to address the risk of flight.' He added: 'Nor do Javice's arguments that an ankle monitor inhibits her ability to teach an exercise class in any way override the statutory detention provisions of the Bail Reform Act. Therefore, for the reasons set forth above, the Government respectfully requests that the Court modify the defendants' bail conditions to require both defendants to resume GPS location monitoring.' For the time being, Judge Hellerstein decided the monitor was required. Ms. Javice, who now faces the possibility of decades in prison, is free on a $2 million bond ahead of her sentencing this summer. She was fitted with her ankle monitor before leaving the courthouse on Tuesday.
Yahoo
02-04-2025
- Business
- Yahoo
Disgraced Frank founder Charlie Javice argues her ankle monitor is ruining her blossoming Pilates career
Charlie Javice, founder of fintech startup Frank, is awaiting sentencing after being found guilty of defrauding JPMorgan Chase to the tune of $175 million. She has been ordered to wear an ankle monitor while awaiting her sentencing, despite launching a Pilates career. Charlie Javice, the 32-year-old entrepreneur convicted of fraud in her $175 million sale of the fintech startup Frank to JPMorgan Chase, has been ordered to wear a GPS ankle monitor while she awaits sentencing—despite her new Pilates career. A federal judge ruled on Tuesday that the monitoring device was necessary despite Javice's legal team objecting that she was a flight risk. Her attorneys argued that the device would interfere with her primary source of income—teaching Pilates in South Florida. 'It would remove the possibility of the one thing she can now do, which is teach her classes,' Javice's attorney, Ronald Sullivan, said at a hearing on her bail terms. Prosecutors argued that Javice, who holds both U.S. and French citizenship, posed a legitimate flight risk, particularly because France does not have an extradition agreement with the United States. Judge Hellerstein, after reviewing arguments and examining photos of Javice teaching Pilates, acknowledged that the monitor could present a challenge but ultimately ruled that the risk of her fleeing was too great to ignore. With her sentencing scheduled for later this year, Javice is free on a $2 million bond, but the judge required her to be fitted with an ankle monitor before leaving the courthouse on Tuesday. She must also comply with movement restrictions that limit her to certain areas in New York and Florida. Javice, who appeared on Forbes' '30 Under 30' list in 2019, was found guilty of fabricating data to mislead JPMorgan into believing her company, Frank, had a much larger user base than it actually did. The charges carry a maximum sentence of 30 years, and Javice will be sentenced in the coming weeks. Javice founded Frank in her mid-20s. The fintech company aimed to simplify the process of filling out the Free Application for Federal Student Aid (FAFSA), a complex government form used by students to apply for financial aid for college or graduate school. In September 2021, Javice sold the company to JPMorgan in a deal worth $175 million. Just over a year later, JPMorgan Chase accused Javice and her co-defendant, Olivier Amar, the chief growth officer of Frank, of collaborating with a data scientist to fabricate millions of fake customer accounts in an effort to deceive the bank. As a result, JPMorgan shut down the Frank website in January 2023, shortly after filing a lawsuit against Javice in Delaware federal court. Javice and co-defendant Amar are now facing the possibility of decades in prison over the deal. This story was originally featured on
Yahoo
02-04-2025
- Business
- Yahoo
Charlie Javice must wear an ankle monitor despite her budding Pilates career, judge rules
Charlie Javice faces up to 30 years for tricking JPMorgan into buying her fintech startup for $175M. After Friday's verdict, her lawyers argued wearing an ankle monitor would ruin her Pilates career. A judge Tuesday ordered her to wear the monitor, but suggested he may change his mind in the future. Convicted JPMorgan fraudster Charlie Javice will have a tougher time teaching Pilates, at least for now. US District Judge Alvin Hellerstein ruled Tuesday that Charlie Javice must wear a GPS ankle monitor in the weeks prior to her August sentencing, at which she faces a possible maximum of 30 years in prison. He also invited Javice's legal team to return to him with a revised bail package and new arguments. "Come up with a package," he advised, after suggesting he would consider ditching the ankle monitor if some other constraints — including an electronically monitored home curfew — were offered. "If you come up with a successful package you would be able to change the terms," he said. Javice, 33, teaches Pilates in Miami Beach, where she and her mother live in the same waterfront apartment building. In her previous career, she founded Frank, a website that helped students fill out their federal financial aid forms. A jury found on Friday that Javice used fake data to trick JPMorgan, the country's largest bank, into believing her website had gathered the names and other personal data of more than 4 million students. The bank had hoped to market checking accounts and credit cards to these students, but later found that Javice had data for fewer than 300,000 of them. The judge's ankle monitor decision on Tuesday followed some 90 minutes of arguments in federal court in Manhattan — complete with court exhibits showing Javice teaching Pilates. In arguing against the ankle monitor, Javice's lawyer, Ron Sullivan, told the judge that Javice has never missed a day of court and is not a flight risk. Wearing the bulky device once again — as she had for several weeks before a November decision granting its removal — would be a severe impediment to her career as a Pilates instructor, Sullivan said. "To have your legs in the air and the monitor going up and down on your leg — it is a significant encumbrance," Sullivan told the judge. The lawyer held both arms aloft and waved them back and forth to demonstrate as he stood at a podium. While wearing an ankle bracelet previously, she was only able to teach lessons briefly, and for family and friends, Sullivan said. Her classes require "demanding physical movement and full flexibility and range of motion, specifically around her feet and ankles," her lawyers argued in court filings earlier Tuesday. "Ms. Javice's services are sought after because her instruction is particularly challenging and dynamic," the filing said. In Hellerstein's courtroom, an assistant US attorney countered that an ankle bracelet is necessary now that Javice, who holds dual French-US citizenship, has been convicted. "We would be well within our rights to seek remand," said the prosecutor, Georgia V. Kostopoulos. "And we understand that pretrial services would not be opposed to that," she said, referring to the agency that handles post-conviction supervision. France does not have an extradition agreement with the United States, prosecutors have said. Hellerstein said that he had examined a GPS ankle monitor earlier in the day. "It's not heavy. It probably weighs a pound," he told the prosecutors and defense lawyers. "So I don't know," he said. "I accept what you say, that it's a restriction on her ability to do the advanced Pilates that she does." Still, he added, "I can't say there is no risk of flight." He briefly retreated to chambers — holding printouts of photos of Javice teaching — to think it over before deciding. The judge also required Javice's codefendant, Olivier Amar, to wear an ankle monitor. As with Javice, Amar's lawyers — who'd argued that a monitor "is quite large" and "makes him a pariah" — were invited to pitch the judge an alternate bail package. Amar is free on a $1 million bond. Javice is free on a $2 million bond. The judge required both to be fitted with ankle monitors before leaving the courthouse on Tuesday. Read the original article on Business Insider Sign in to access your portfolio
