Charlie Javice, once celebrated as a rising star of the tech world, is set to stand trial this week in New York, accused of orchestrating a multimillion-dollar fraud that saw her sell her student finance startup, Frank, to JP Morgan Chase for $175 million (£141 million).
Javice, 31, joins the growing ranks of high-profile entrepreneurs tainted by what some have dubbed the “Forbes 30 Under 30 curse”—a list of once-promising figures, including Martin Shkreli, Sam Bankman-Fried, and Caroline Ellison, who have faced legal troubles after achieving early acclaim.
The case, which carries echoes of Elizabeth Holmes and the Theranos scandal, centres on allegations that Javice massively inflated the number of Frank’s student users to convince JP Morgan to acquire the business. Prosecutors claim she misrepresented data, claiming the platform had 4.25 million users when it had fewer than 300,000.
The alleged deception unravelled when JP Morgan attempted to contact Frank’s customers, only to receive a fraction of the expected responses. The bank fired Javice, shut down Frank in early 2023, and sued her for fraud. She countered by suing JP Morgan for legal costs and for terminating her before she could receive a $20 million retention bonus.
A trial that could reshape startup due diligence
Javice, who founded Frank at 24 to simplify student loan applications, reportedly sought the help of her co-defendant, Olivier Amar, to fabricate user data. According to the indictment, when Frank’s director of engineering raised concerns about the legality of generating synthetic user data, Amar reassured them: “Yes, it’s legal. We don’t want to end up in orange jumpsuits.”
JP Morgan CEO Jamie Dimon later admitted that acquiring Frank was a “huge mistake,” highlighting the bank’s failure to conduct adequate due diligence before signing off on the deal. Legal and governance experts argue that the trial will raise uncomfortable questions about whether financial giants are too eager to acquire fast-growing startups without thorough vetting.
Javice’s trial draws comparisons not only to Holmes, now serving an 11-year prison sentence, but also to the case of British tech tycoon Mike Lynch, who was accused of fraud following Hewlett-Packard’s $11.1 billion acquisition of his company, Autonomy. Like those cases, this trial will explore whether the deception was deliberate or if the buyer ignored red flags in pursuit of a lucrative deal.
Prosecutors have already scored a key advantage, with Amar agreeing to testify against Javice. His testimony could be pivotal in proving that she knowingly misled JP Morgan. Meanwhile, the defence argues that the case is one of “buyer’s remorse,” insisting that JP Morgan was well aware of the risks and failed to conduct proper due diligence.
Beyond the legal proceedings, the trial is set to shine a light on the aggressive growth tactics and culture of hype that have long fuelled the startup ecosystem. Investors, including Apollo Global Management’s Marc Rowan and female-focused investment firm Gingerbread Capital, poured $20 million into Frank, seemingly without detecting any signs of fraud.
Before her downfall, Javice was the poster child for young entrepreneurship, splitting her time between Miami and New York, starting her days with pilates and ending them with sunset yoga. In a 2021 interview, she advised aspiring entrepreneurs: “If you see an opportunity, don’t be afraid to jump.”
By November 2022, she was on Forbes’ prestigious ‘30 Under 30’ list. A year later, the magazine had placed her in its ‘Hall of Shame’.
