Entrepreneur Charlie Javis, convicted of fraud in the $175 million sale of her startup Frank to JPMorgan Chase, received more than seven years in prison. The sentence was handed down on Monday by Manhattan Federal Judge Alvin Hellerstein.
Court Verdict
33-year-old Javis was found guilty in March on four counts: bank and securities fraud, wire fraud, and conspiracy. The prosecution had sought a 12-year prison sentence.
Career and Deception
Frank was founded by Javis in 2017 and positioned as a service that streamlines the financial aid application process for students. It quickly gained market attention and even made the Forbes “30 Under 30” list in 2019.
However, after the deal with JPMorgan in 2021, it was revealed that the company’s claimed 4.25 million users were fictitious. The actual base was only about 300,000 customers. JPMorgan CEO Jamie Dimon called the acquisition of Frank a “serious mistake.”
Defense and Appeal
Javis pleaded not guilty and intends to appeal the verdict. Her lawyers argue that the damage to the bank has been exaggerated, and that her actions should be viewed as an “isolated blunder.” For her appeal, she has retained renowned attorney Alexander Shapiro, who has represented Sean “Diddy” Combs and Sam Bankman-Fried.
Former Frank Development Director Olivier Amar was also found guilty on the same charges. His sentencing is expected on October 20.
JPMorgan Chase, the largest US bank by assets, has challenged the entire open banking system by introducing new fees for data aggregators such as Plaid and MX. This move could radically alter the balance of power in the fintech sector and threaten the models that have underpinned the development of digital financial services in the country.
Now, intermediaries will have to pay the bank to access customer data. The industry had previously thrived on the free exchange of information for over a decade. The first payments could appear as early as October 2025, and negotiations over access terms are ongoing. Experts warn that the consequences for the aggregator ecosystem and the entire open finance system could be extremely serious.
