Start-up founder Charlie Javice, who was convicted of defrauding JPMorgan Chase, has been sentenced to serve 85 months in federal prison.
After Javice, 32, was found guilty of conspiracy, wire fraud, bank fraud and securities fraud in March, her sentence was revealed during a court hearing on Monday, September 29.
She committed the crimes in an attempt to “fraudulently induce” JPMorgan to purchase her company, Frank, for $175 million, according to a press release from the U.S. Attorney’s Office for the Southern District of New York.
“Javice perpetrated a $175 million fraud—repeatedly lying about the success of her startup company and even hiring a data scientist to create fake data to back up her lies,” prosecutor Amanda Houle said in the release. “Today’s sentence sends a clear message that brazen frauds will be met with serious penalties. Our Office will continue to work tirelessly to hold accountable those who seek to profit through fraudulent schemes and lies.”
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In addition to her 85 month imprisonment sentence, Houle also announced that Javice was ordered to pay over $300,000,000.
Before her sentencing hearing, the Associated Press reported that Javice told the court she was “haunted that my failure has transformed something meaningful into something infamous.”
“Not a day goes by that I do not replay my mistakes, searching for meaning,” Javice added, according to Business Insider. “Not a day passes that I do not feel profound remorse.”
US District Judge Alvin Hellerstein told Javice during the sentencing, “I don’t think you will be committing any crimes, and I think you will be devoting your life to services. But others need to be deterred.”
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Javice founded Frank in 2017. The company intended to make the process of filling out the Free Application for Federal Student Aid, a government form for students seeking financial aid for college, simpler.
Federal prosecutors said that Javice began to pursue buyers for Frank in 2021, including JPMorgan. “Javice represented repeatedly to those banks that Frank had 4.25 million customers or ‘users,’” the press release stated. “In fact, Frank had approximately 300,000 users.”
Prosecutors went on to state that JPMorgan wanted to verify the number of Frank’s users and the amount of data collected about them. When asked for the information, Javice allegedly created a “synthetic data set” to add more customers and “caused” a third-party vendor to “convey” the fake spreadsheet to the banking giant.
Javice allegedly received more than $21 million for selling her equity stake in the company, and prosecutors said she was scheduled to be paid around the same amount as a retention bonus.
Additionally, the prosecutors said that the judge enforced a forfeiture judgment of $22 million.
