The founder sold her financial aid startup to JPMorgan Chase in 2021.
Charlie Javice sentenced to 7 years in prison for $175M fraud
Luiz C. Ribeiro for NY Daily News via Getty Images
Luiz C. Ribeiro for NY Daily News via Getty Images
Charlie Javice arrive at Manhattan Federal Court Southern District, June 06, 2023, in New York City.
Charlie Javice arrive at Manhattan Federal Court Southern District, June 06, 2023, in New York City.
Charlie Javice arrive at Manhattan Federal Court Southern District, June 06, 2023, in New York City.
Charlie Javice arrive at Manhattan Federal Court Southern District, June 06, 2023, in New York City.
Startup founder Charlie Javice was sentenced Monday to seven years in prison for a crime the judge called "biblical," defrauding JPMorgan Chase out of $175 million.
"Among the many commandments in the bible are the commandments of just weights and measures. Yours was not a just weight and measure," Judge Alvin Hellerstein said during the sentencing hearing.
Javice was convicted of fraud in March for lying about her financial aid startup, and prosecutors had requested a 12-year sentence.
Charlie Javice arrive at Manhattan Federal Court Southern District, June 06, 2023, in New York City. Luiz C. Ribeiro for NY Daily News via Getty Images
Before Hellerstein imposed the sentence, Javice stood to express remorse and to apologize.
"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 blotted her eyes with a tissue as she turned to tearfully ask her mother and father for their forgiveness.
"I miss being a source of pride for my family," Javice said.
"You're a good person," Hellerstein said. "You've done a bad thing, and I have to punish you."
Javice, 33, founded Frank in 2017 and served as its CEO until its acquisition in September 2021. Frank was a startup designed to simplify the process of filling out the Free Application for Federal Student Aid.
She fraudulently claimed Frank had 4 million customers by referring to someone who merely clicked on the site as a user. In fact, Frank had only several hundred thousand customers.
Had JPMorgan Chase known the truth -- that Javice's company only had a few hundred thousand users -- it would not have acquired Frank, which turned out to have no value to the bank, according to prosecutors.
Marquee at the main entrance to JPMorgan Chase headquarters building in Manhattan. Erik Mcgregor/LightRocket via Getty Images
"The sole source of value in Frank was its purported relationships with millions of college age students. Those millions of relationships with students turned out to be illusory and, as a result, so too was Frank’s value," prosecutors said.
The defense argued for a shorter sentence, casting Javice’s crimes as a "singular lapse in judgment at age 28.
They said she "helped real families achieve real dreams -- first-generation Americans, children of immigrants, young people from underserved communities who saw college not as an entitlement but as a distant hope made suddenly possible.”
The defense also cited the "chorus of support" from more than 100 people who submitted letters to the court.
"Together they form a rare portrait of a young woman whose compassion, loyalty, and reliability stand out in a courtroom where such qualities are seldom constant. The refrain is the same: she is the one people call when everything is falling apart," defense attorneys said.
[SRC] https://abcnews.go.com/Business/charlie-javice-founder-lied-175m-startup-faces-sentencing/story?id=126034577
