The criminal trial against Charlie Javice for allegedly defrauding JP Morgan Chase into buying her fintech Frank, has begun.
Javice pleaded not guilty to securities fraud, wire fraud, bank fraud and conspiracy over JPMorgan's $175 million purchase of college financial planning platform Frank in July 2021.
In court, her lawyer argued that there was no fraud and that JPMorgan had "buyer's remorse," according to Reuters.
The bank agreed to buy Frank - which provides an online portal that lets users apply for financial aid in minutes and enrol in a catalogue of online college courses - in late 2021.
But, in early 2023, it sued founder and then CEO Javice - now 32 - accusing her of producing a list of “fake customers - a list of names, addresses, dates of birth, and other personal information for 4.265 million ‘students’ who did not actually exist”. In fact, the company allegedly only had around 300,000 customers.
Soon after, she was arrested for conspiracy, wire fraud, and bank fraud and was released on a $2 million bond.
According to Reuters, Jose Baez, a lawyer for Javice, told jurors during his opening argument last week that JPMorgan undertook extensive due diligence into Frank, and knew how many clients it had before completing the purchase.
Baez claims the bank only made its claims a year after the deal when financial aid regulations changed and it wanted to back out of the agreement.