Charlie Javice sentenced to 7 years in prison for JPMorgan fraud

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A federal judge on Monday sentenced Charlie Javice to seven years in prison after a New York jury convicted the young entrepreneur of defrauding JPMorgan Chase in the $175mn sale of her fintech start-up.

Wearing a cream-coloured suit, Javice made a tearful speech to the court in which she apologised to her parents, her boyfriend and “the shareholders of JPMorgan”.

“At my core I still believe I’m a good person,” she said. “Whatever sentence is imposed, I will accept with dignity and humility.”

Judge Alvin Hellerstein of Manhattan federal court also ordered Javice to pay restitution to JPMorgan of $288mn and forfeit an additional $22mn. “You’re a good person who has done a bad thing,” Hellerstein told her.

The judge, however, allowed Javice to remain free on bail while she pursued her appeal.

“If there’s an opportunity to succeed I’d like to give it to her,” the judge said. “The only way I can give it to her is through bail. We are all human beings and it would be wrong not to think of it.” Javice had indicated in recent court filings she is being treated for a serious medical condition.

Javice’s start-up Frank, which she founded in 2017 shortly after graduating from the University of Pennsylvania’s Wharton School, helped college applicants navigate financial aid forms.

JPMorgan purchased Frank in 2021 and told the court this year it did so to get access to what it believed were more than 4mn users.

The bank said it later learned the company had a customer base of just a tenth of that figure. It said Javice, 33, and her co-founder Olivier Amar had hired a data scientist to create millions of fabricated users at the time of the company’s sale process. Javice was found guilty in March.

At Monday’s sentencing hearing, Hellerstein was critical of the bank, saying it was responsible for “very poor due diligence”. But the judge said he “was punishing her conduct, not JPMorgan’s stupidity”.

Amar has been separately convicted of fraud and is due to be sentenced in October.

Prosecutors requested a 12-year prison sentence, asking the court to send a “desperately needed” message to start-up founders, among whom there had been an “alarming trend” of “engaging in fraud, including making misrepresentations about their companies’ core products or services”.

“A significant sentence will be required to deter Javice and to signal to even the most hubristic founders that their misrepresentations to investors will be met with serious sentences,” the government wrote in a recent court filing.

Lawyers for Javice wrote in submissions to the court that her crime “represents a profound aberration in an otherwise exemplary life” and that “Frank was a real company, not a fraud”. They added she had “not been driven by greed”.

In court Ronald Sullivan, a lawyer for Javice, said there was “no evidence here of greed, lavish lifestyles, Ferraris, yachts, private jets [or] jet-setting across the world”.

He said Javice should receive a shorter sentence than Theranos founder Elizabeth Holmes, who was sentenced to more than 11 years in federal prison for fraud in 2022, because “she had a real company that actually helped people”.

Javice had submitted more than 100 letters of support from her family, friends and even the doormen at the apartment buildings where she has resided.

Marc Rowan, the Apollo Global Management co-founder, who had personally invested in Frank and mentored Javice, also asked Hellerstein impose “a lenient sentence” in a letter to the court.

In a court filing, the government said Javice had invested some of the proceeds of her fraud in funds managed by Apollo and by Motive Partners, a private equity firm that Apollo owns a stake in. It said she had invested some of the money in a Tiger Global private investors’ fund, for which JPMorgan had helped raise cash by tapping its wealthy clients.

Javice’s lawyers argued, given JPMorgan’s $868bn market capitalisation, that a $175mn write-off would be analogous to a $58 loss for the median American family. JPMorgan has a pending civil lawsuit against Javice.

In her letter to the judge, Javice asked for “mercy”. “Whatever sentence Your Honour imposes, I will carry out with dignity and grace. I have learned from my mistakes and promise to do better and to be better.”