Key takeaways:

• Charlie Javice was convicted for defrauding JPMorgan Chase out of $175 million.
• Javice exaggerated her startup Frank's customer base by tenfold, claiming over 4 million clients.
• She faces a maximum prison sentence of 30 years as a result of the guilty verdict.

CHARLIE JAVICE, a prominent figure in the tech startup world, has been found guilty by a jury in a federal court in New York of defrauding JPMorgan Chase of $175 million. The charges relate to her company, Frank, which aimed to streamline the process of applying for financial aid through the complex Free Application for Federal Student Aid (FAFSA). The conviction came after a five-week trial during which evidence was presented showing that Javice had lied about having more than four million customers when, in fact, her user base was around 300,000.

Javice, who co-founded Frank in 2016 and quickly ascended to media attention and accolades, misrepresented her startup's customer numbers significantly, inflating them by tenfold to entice JPMorgan into a buyout deal in 2021, according to The New York Times. During the trial, it was revealed that when JPMorgan attempted to leverage Frank's purported customer list, the results were disastrous; only 28% of emails sent to this list were successfully received.

According to Forbes, Javice faces the possibility of up to 30 years in prison for her convictions, which include bank fraud, wire fraud, and conspiracy charges. Each of these charges carries potential sentences of decades behind bars, akin to those faced by high-profile fraud cases like that of Elizabeth Holmes, the founder of Theranos.

The jury's decision came amid accusations that Javice and Olivier Amar, Frank's chief officer of growth, devised fraudulent tactics to pad Frank's success metrics. Testimony revealed that she had allegedly instructed her chief engineer to create fake data to substantiate her claims. The engineer, Patrick Vovor, testified he refused to comply with Javice's request, affirming, “I would not do anything illegal.” Instead, Javice reportedly paid a friend to fabricate thousands of identifiers in an attempt to mislead JPMorgan's due diligence process, as noted by NPR.

The fallout from this conviction is set to continue with a civil lawsuit from JPMorgan, as the bank seeks to recover the funds lost through the acquisition of Frank, which it describes as based on false pretenses. Javice's sentencing is scheduled for July 23, while the defense contemplates challenging the verdict based on the argument that the evidence against her was insufficient.