Charlie Javice was sentenced to seven years in prison on Monday for defrauding JPMorgan Chase out of $175 million, in a case that federal prosecutors described as one of the largest startup frauds in recent memory.
U.S. District Judge Alvin Hellerstein called the scheme “biblical” in scale and morality, citing religious commandments on “just weights and measures” while delivering his ruling. “Yours was not a just weight and measure,” he told Javice.
The sentence follows her March conviction on fraud charges. Prosecutors had sought a 12-year term.
Emotional Plea Before Sentencing
Before receiving her sentence, Javice, now 33, addressed the court with a tearful apology.
“At 28 I did something that runs against the grain of my upbringing,” Javice said. “I made choices that I will spend my entire life regretting.”
She turned to her parents, asking for forgiveness. “I miss being a source of pride for my family,” she added.
Judge Hellerstein acknowledged her remorse but maintained the need for accountability: “You’re a good person. You’ve done a bad thing, and I have to punish you.”
Fraudulent Claims Behind JPMorgan Acquisition
Javice founded the financial aid startup Frank in 2017 with the goal of simplifying the federal student loan application process. In 2021, JPMorgan acquired the company for $175 million.
Prosecutors said the acquisition was built on false claims that Frank had 4 million users, when in reality the platform had only several hundred thousand. Javice allegedly inflated customer numbers by counting anyone who had clicked on the site as a “user.”
“The sole source of value in Frank was its purported relationships with millions of college-age students,” prosecutors wrote. “Those millions of relationships turned out to be illusory and, as a result, so too was Frank’s value.”
Had the bank known the true figures, JPMorgan would not have moved forward with the acquisition, prosecutors argued.
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Defense Sought Leniency
Javice’s attorneys argued for a shorter sentence, framing the case as a “singular lapse in judgment at age 28.” They said Javice’s platform nevertheless provided meaningful assistance to families navigating higher education financing.
“She helped real families achieve real dreams—first-generation Americans, children of immigrants, young people from underserved communities,” defense counsel said in a filing.
The defense also pointed to what it called a “chorus of support” from more than 100 letters submitted to the court, portraying Javice as compassionate, loyal, and dependable. “The refrain is the same: she is the one people call when everything is falling apart,” her attorneys added.
Broader Implications for Startups
The case highlights the growing scrutiny of venture-backed startups and the risks that financial institutions face when acquiring companies with limited transparency. Prosecutors emphasized that inflated metrics not only misled JPMorgan but also harmed trust in the broader financial and startup ecosystem.
With Javice sentenced, the Justice Department signaled its commitment to pursuing similar fraud cases where valuations are artificially propped up by misleading data.
