JPMorgan files lawsuit against Wharton grad, saying her financial aid company was a fraud

Jan. 23—A massive bank is suing a 30-year-old Wharton graduate, alleging that she inflated her company's value before selling it for $175 million.

JPMorgan Chase filed a civil lawsuit last month against Charlie Javice, a 2013 graduate from the University of Pennsylvania's Wharton School and founder of the start-up Frank, a company that aimed to simplify the financial aid process for college students. JPMorgan bought Frank from Javice in 2021 for $175 million and made her its managing director for student solutions.

But according to the lawsuit, JPMorgan said that Javice sold them a lemon.

What are the basics?

Details from the case, filed in U.S. District Court in Delaware, accuse Javice of concocting an elaborate plan to pad Frank's metrics and value. Javice's lawyers say the bank's claims aren't true and are countersuing.

Court documents indicate that Javice told JPMorgan executives that Frank had 4.25 million users in a database that included their full names and contact information. Buying Frank would give the bank access to a Rolodex of new, curated college-aged students in need of financial assistance and a bank to work with.

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But after the deal closed, the bank attempted a test marketing campaign to a segment of Frank's customers. The lawsuit describes the results as "disastrous," with only 28% of the 400,000 emails sent delivered and only 1.1% of the delivered emails opened — an abysmal rate.

JPMorgan turned to Javice's own emails from her Frank account — which it now owned — to see what was going on.

Those emails allegedly revealed a scheme between Javice and a data science professor she hired to create fake customers to provide to the bank.

"Javice chose to invent several million Frank customer accounts out of whole cloth," the lawsuit said.

In her countersuit, Javice's legal team calls JPMorgan's claims "groundless," says the bank owes her money from the deal, and is required to pay her legal expenses.

Who is Charlie Javice?

Javice is a 2013 Wharton grad who graduated from the Philadelphia university in three years. Penn officials confirmed to the New York Times that Javice had a bachelor of science in economics with a major in finance and a second major in operations and information management. She attended a private high school in Westchester County, N.Y.

While in school, she was involved with Wharton's Social Impact Initiative and its entrepreneur programs, her LinkedIn profile said. She founded the nonprofit PoverUP, an investment platform that aimed to reduce poverty through business.

Throughout the late 2010s, Frank — which was established in 2016 — was growing in popularity and Javice was making the rounds in the financial sphere and media.

In 2017, her New York Times opinion piece about the Free Application for Federal Student Aid, a form known as FAFSA, contained so many errors that it required a long correction. A year later, a Yahoo Finance article touted Javice and Frank as the solution to student debt issues. She was also featured in Fast Company's Most Creative People list.

The internet loves allegations of a girl boss con queen

Online, discussions over Javice and the allegations against her run the gamut.

Some are impressed by her ability to allegedly con the country's biggest bank. Others criticized banks for giving more scrutiny to people opening small lines of credit than to large deals with Ivy Leaguers such as Javice.

"Please I need more goss about the (alleged) scam queen of JP Morgan," one tweet said. "Whatever she may lack in fake total valuation, she makes up for with audacity and gumption."

Javice appears to have deleted her social media footprint, including previously listed Twitter and Instagram accounts. She has not spoken publicly about the lawsuits.

30 Under 30s receive scrutiny

Another topic of discussion to come from commentary on the lawsuit against Javice? That 30 Under 30 Lists might be the internet's latest red flag.

As some social media users have pointed out, Javice is the latest in a string of Forbes 30 Under 30 honorees to become embroiled in fraud accusations. She was named to the annual list in 2019 for the work she was doing with Frank.

Other millennials named to the Forbes 30 Under 30 list and later accused or convicted of fraud include Sam Bankman-Fried of FTX, Caroline Ellison of Alameda, and Elizabeth Holmes of Theranos. Unlike them, however, Javice is not facing criminal charges.

Last week, Temple University caught heat for its own 30 Under 30 mistake.

The school mistakenly sent emails to seemingly well over 30 alumni letting them know — and later retracting — the fact that they were nominated.

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