Forbes 30-Under-30 winner facing claims she duped JPMorgan into buying 'Amazon startup' for $175M

Charlie Javice, a 30 year-old entrepreneur who is being sued by JPMorgan after the bank bought her education startup claims boss Jamie Dimon knew how big her company was before going ahead with the deal and that claims of fraud are unfounded.

JPMorgan, the largest U.S. bank by assets paid the $175 million for Frank in September 2021 a bid to deepen its ties with students. 

The bank said it was led to believe more than 4.25 million students had created accounts on Frank.

However, when JPMorgan sent marketing test emails to a list of Frank's customers that the company had provided, only 28% of them were delivered, the bank alleged.

JPMorgan said it generally sees a delivery rate of 99% with similar campaigns and is now accusing Javice of 'tricking' the bank with a list of fake customer names. 

Charlie Javice, 30, who is being sued by JPMorgan after they acquired her education startup for $175 million, has denied the bank's allegations of fraud

Javice claims that Jamie Dimon, JPMorgan's CEO, was aware of her company's size before proceeding with the deal

JPMorgan fired Javice last November and then sued her in a U.S. District Court in Delaware the following month. 

Javice and another executive at the company, Olivier Amar, allegedly paid a data scientist $18,000 to create a list of fake customers to inflate Frank's true size when its own employee refused, a lawsuit alleges. 

Javice is accusing the bank of trying to blame her for a failed strategy in a lawsuit filed in federal court in December. 

Javice denies inventing the 4 million names said to have been made up using artificial intelligence, and is instead countersuing the bank for $28 million in compensation which she claims to be owed following the bank's backing out.

She insists bank Chief Executive Jamie Dimon had been eager to buy her company. 

The bank alleges that Javice and another executive, Olivier Amar, pictured, paid a data scientist $18,000 to create a list of fake customers to inflate Frank's true size

Charlie Javice, 30,  says the bank has possibly tarnished her reputation for life

Dimon told Javice in a meeting before the deal that he believed his team should 'get the deal done.' He has since described the deal as 'a huge mistake.'

Javice says the bank has possibly tarnished her reputation for life. 

'JPMorgan paid $175 million for what it believed was a business deeply engaged with the college-aged market segment with 4.265 million customers; instead, it received a business with fewer than 300,000 customers,' the bank said in the lawsuit filed last month.

An attorney for Javice, however, has denied the allegations.

'After JPM rushed to acquire (Javice's) rocketship business, JPM realized they couldn't work around existing student privacy laws, committed misconduct and then tried to retrade the deal,' Javice's attorney said in January, adding that the bank's lawsuit was 'nothing but a cover.' 

'We stand behind our allegations, and this dispute will be resolved through the legal process,' a bank spokesman said on Monday to WSJ. 

Javice, who is the daughter of a successful investment manager based in New York, purchased an apartment in Miami Beach in May 2021 for just under $1.5million, according to Miami-Dade property records.

She started Frank a few years after graduating from Wharton business school, she revealed during an interview about her entrepreneurial success with a former tutor, which the school uploaded to its YouTube channel.

In her initial defense, Javice did not contest that less than 500,000 individuals utilized Frank to complete financial-aid forms. 

She stated that she had informed JPMorgan executives of this during meetings before the acquisition and clarified that the majority of the almost 4.3 million users were individuals who visited the website to read articles on financial aid or trusted Frank to assist them in comprehending the college funding process. 

Javice purchased an apartment in this complex on Miami Beach in May 2021, according to Miami-Dade property records

In the lawsuit, JPMorgan said that it was pitched the company by Javice on a 'lie' that more than four million users had signed up to use the tool.

After the bank asked for proof of that claim while carrying out due diligence, she and Amar allegedly fabricated a database of names, addresses, schools and dates of birth for fictitious students.

The data suggested Frank had around 4,265,000 customer accounts - in reality fewer than 300,000 of those were legitimate, it's claimed

The bank says the scheme unraveled when it tried to email those users and 70 percent of its emails bounced back,

Javice refuted the accusation that she had created a fabricated list of users to deceive the bank. Instead, she claimed that JPMorgan had asked for a 'synthetic data set of users' that reflected Frank's actual customers as a way to audit her users and avoid privacy issues by not sharing their real names. 

She asserted that JPMorgan was aware that the user number she provided was based on synthetic data, not actual user data. 

Javice argued that JPMorgan's financial team would have been able to determine the number of customers she had based on other metrics in her proposal, such as her total marketing expenses. 

She informed the bank that she spent around $5 per customer in marketing costs and had spent a total of $2.25 million in marketing.

Javice contended that JPMorgan's allegations were an effort to conceal its own wrongdoing, which included a plan to profit from information about past Free Application for Federal Student Aid (Fafsa) filers, which would have violated federal regulations. 

She claimed that the bank was scrambling after discovering new restrictions on how Fafsa forms could be submitted last summer, which would have limited Frank's ability to submit applications on behalf of students.

Javice made $10million as part of the merger with JPMorgan, with a $20million bonus to follow at a later date. Amar made $5million from the deal, with a similar $3million bonus.