Meet Charlie Javice, the Woman Who JP Morgan Believes Bilked Them for $175 Million

In 2021, Charlie Javice, founder of the college financial platform Frank, sold the company to JPMorgan Chase for $175M. Frank has been compared to TurboTax, but instead of helping with taxes, it helped students and their families fill out the FAFSA, discover scholarships, and choose financial aid packages. JPMorgan noted that the acquisition was unique in that it could help develop lifelong customers of the bank. Its founder, Charlie Javice, became a managing director at JP Morgan after the acquisition. 

In 2019, Ms. Javice was a member of the Forbes 40 Under 40 list like fellow (alleged) fraudster Sam Bankman-Fried and convicted fraudster Elizabeth Holmes. A graduate of the Wharton School of Business, Ms. Javice founded Frank to help students navigate the increasingly complex world of tuition payment.

Several months ago, JP Morgan sent a marketing email to 400,000 users of Frank. Unfortunately, 70% of the emails bounced- they simply didn’t exist. JP Morgan alleges that Ms. Javice hired a data scientist to create millions of fake accounts, artificially increasing the value of her company. She approached the bank about purchasing in 2021. When JP Morgan was buying the company, Ms. Javice claimed that 4.25 million students used Frank. JP Morgan claims that the number was actually less than 300,000.

JP Morgan filed a lawsuit in federal court last month and is now suing Ms. Javice. In the lawsuit, JP Morgan provided emails between Ms. Javice and a data scientist who works as a professor. The data scientist is unnamed in the lawsuit. JP Morgan has access to the emails because the bank purchased the company and its systems. Ms. Javice claims that JP Morgan owes her millions of dollars and is making up reasons to fire her. She is asking the bank to pay her legal bills.

Some are questioning JP Morgan’s due diligence process. It seems odd they could miss something like this on a $175M purchase. Their oversight is even more intriguing given that Ms. Javice has run into trouble misleading customers and investors in the past.

Ms. Javice first ventured into the world of entrepreneurship as a high school student. Along with her brother Elie, she co-founded PoverUp, an organization seeking to crowd-raise money to lend to entrepreneurs in developing countries. She then competed for the Thiel Fellowship, a $100,000 grant from Peter Thiel to skip college and develop fledgling companies. Ms. Javice claimed that she turned the grant down, though The Daily Beast recently published a rejection letter she received.

Ms. Javice graduated from the University of Pennsylvania in three years and founded Frank at the age of 24. She noted in an interview with the school’s newspaper, The Daily Pennsylvanian, that one of the reasons for her starting Frank was that she struggled with the financial aid process. What she failed to disclose was that her father worked on Wall Street for over 35 years, including stints at Goldman Sachs and Merrill Lynch. It’s hard to imagine she struggled financially in college.

In 2018, Ms. Javice settled with the Department of Education for various marketing materials including their website name “Frank’s FAFSA.” She was then sued by her co-founder over a compensation dispute.

During the COVID-19 pandemic, the Federal Trade Commission (FTC) sent Ms. Javice and Frank a warning letter on several points. The first was that the company offered a generic letter for students to fill out to receive aid that didn’t adhere to specific school requirements. For example, the aid application at UC Berkley may differ significantly from the aid application at Stanford.

Second, the company claimed to offer cash advances to students that didn’t need to be paid back until the student received aid. In the fine print, the students had to pay back the loans in 60 days.

Third, the company offered online classes for several hundred dollars, taught by faculty from Keiser University. The university denied all ties with the company. A similar situation arose at Lee University.

Despite these mishaps, JP Morgan purchased the company and offered Ms. Javice $20M to stay around. While it’s unclear if she will be found guilty in this case, her checkered history is ripe with misleading pitches.