Founder of Student Aid Startup Frank Appears in Court

The founder of student aid startup Frank shook her head repeatedly Thursday as a prosecutor claimed that she tricked J.P. Morgan Chase into paying $175 million for her business by lying about its client base.

Assistant U.S. Attorney Micah Fergenson described criminal charges against Frank founder Charlie Javice and codefendant Olivier Amar, the company’s chief growth officer, to a federal judge at a pretrial hearing during which each of them entered pleas of not guilty to an indictment unveiled Wednesday.

Fergenson said the deal two years ago was consummated only after Javice and Amar “created a fake data set” in response to the bank’s data validation request to make it appear that Frank had over 4 million customers rather than the roughly 300,000 clients the company actually had.

As Fergenson spoke, Javice, a Miami, Florida, resident, repeatedly shook her head.

The prosecutor said Javice, 31, and Amar, 49, produced lots of data for J.P. Morgan Chase but that “it was all fake.”

He said the pair paid $100,000 to purchase college student data with over 4 million names and contact information, but when the bank tested about 400,000 of the entries, the “response was horrible.”

“A lot of the emails didn’t work,” Fergenson said.

Javice’s attorney, Alex Spiro, predicted that yet-to-be-disclosed communications between J.P. Morgan Chase executives at the bank will ultimately support his client’s contention that she did not act illegally.

He said prosecutors were “just regurgitating” the claims J.P. Morgan Chase made in a lawsuit against his client. He said prosecutors would typically gather evidence such as communications among the bank’s employees before bringing criminal charges.

After Spiro spoke, Fergenson acknowledged that prosecutors still must review hundreds of thousands of documents before enough evidence will be given to defense lawyers that a trial date could be set as early as Aug. 15, when the next pretrial hearing is scheduled.

Lawyers for Amar did not immediately return messages seeking comment.

Javice was arrested in April. Authorities said then that she would have pocketed $45 million from the deal.

Javice had appeared on the 2019 Forbes 30 Under 30 list of young professionals with admirable careers.

In 2017, she founded TAPD Inc., which operated under the name Frank, to provide an online platform to simplify the process of filling out the Free Application for Federal Student Aid, a federal government form used by students to apply for financial aid for college or graduate school.
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