Charismatic entrepreneur, Charlie Javice, who is currently facing charges of defrauding JPMorgan Chase & Co in the acquisition of her former college financial aid startup Frank for a whopping $175 million in 2021, arrived at the United States Court in Manhattan, New York City on June 6, 2023.
Photo by Mike Segar | Reuters
Employees of a startup that was acquired by the banking giant JPMorgan Chase expressed disbelief when the founder of their company instructed them to inflate their customer count before the acquisition. Internal messages released in a legal filing on Thursday revealed this shocking information.
According to JPMorgan’s allegations in the filing, the founder named Charlie Javice instructed the employees to manipulate the “public-facing numbers” of their college aid platform, Frank, to show a customer count of 4.25 million in January 2021. However, at the time of the acquisition in September 2021, Frank actually had less than 300,000 genuine customers.
“Do we really have 4.25M students?” questioned one skeptical Frank employee in a Slack thread from January 2021.
“Is this real?” asked another employee in disbelief.
“Charlie is the master of finding magic numbers,” commented one employee whose name was redacted in the filing.
The disclosure of these private staff messages serves as the latest bombshell in the ongoing legal battle between Javice and JPMorgan, who paid a staggering $175 million for the acquisition of Frank. JPMorgan, as the largest bank in the United States and a frequent acquirer of financial technology startups, filed a lawsuit against Javice in December 2022, accusing her of deceiving the bank about the true scale of her company.
In response to the filing, Javice allegedly justified the revision in user statistics by explaining that website visitors should be counted as customers, according to JPMorgan.
In their initial lawsuit, JPMorgan claimed that Javice hired a data science professor to fabricate fake accounts after an employee refused to comply with the scheme.
Javice’s troubles have only worsened in recent weeks. In April, she was hit with criminal charges by the Department of Justice and faced a lawsuit from the Securities and Exchange Commission, both accusing her of fraudulent activities in relation to the sale of her company.
Javice, in her court filings, has argued that JPMorgan was fully aware of the actual user count of Frank and is now trying to shift blame onto her for their own mistakes.
A lawyer representing Javice did not respond to late Thursday messages.
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