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US’s largest bank, JP Morgan Chase & Co., was bought by young Jewish entrepreneur Charlie Javis for $175 million by faking millions of supposed customers. It is accused of being induced to do so.
In a lawsuit filed last month, the bank alleges that the once-promising CEO on Forbes’ 30 Under 30 list was involved in an elaborate scheme to inflate the client list of her university financial planning startup Frank. condemned. 2021 years.
The bank claims Javice and Frank’s former Chief Growth and Acquisitions Officer, Olivier Amar, has impersonated nearly four million customers, hired data science experts to hide their behavior, and created millions of millions on the platform. He accused the due diligence team of deceiving him by creating a fake profile.
“To make a profit, Javis chose to lie, including lying about Frank’s success, Frank’s size, and Frank’s depth of market penetration,” the lawsuit read.
Meanwhile, Javice’s attorneys denied the charges against the client and filed a lawsuit against JPMorgan for trying to avoid paying her.
Now 30, she founded Frank in 2016 when she was just 24. With the explicit goal of helping college students submit financial aid forms and save billions in tuition fees, Frank and her young founder caught the world’s attention.
But according to JP Morgan, it was largely a hoax, or at least a highly exaggerated success story. The bank claims Frank never exceeded 250,000, not the 4.25 million college students he claimed he would have as a customer by the end of 2021.
Yes, rich people can be deceived. Call it greedy. JP Morgan paid a fraudster, in this case fraudster Charlie Javis, his $175 million to buy a college financial aid company. Turned out to be a complete scam. Please add her to her list of scam entrepreneurs. Rich, isn’t it? pic.twitter.com/PURj9GWM2b
— means Mr. Mustard ?????????? ?????????? ???????????? January 21, 2023
The New York Times reports that Javice continued to receive positive coverage from major news outlets such as Forbes, Fast Company Magazine, Medium and Insider despite repeated warning signs.
The U.S. Department of Education took notice of Frank soon after its inception. In its early days, the company offered financial assistance to college students on a website called frankfafsa.com.
FAFSA stands for Free Application for Federal Student Aid, a registered trademark that Frank used without permission, the ministry said at the time. As part of the settlement agreement reached in 2018, Frank turned over her web address to the department and switched to another of his.
Around the same time, Frank’s co-founder, Israeli Adi Omesee, sued Javis for wage theft in Israel and received compensation.
However, this did not stop her overwhelmingly positive media coverage.
In 2018, Business Insider published the following article:
In the article, Javice claimed that Frank saved users an average of $28,000 in tuition fees.
However, in an article published following JPMorgan’s lawsuit against Javice, citing student assistance expert Mark Kantrowitz, Frank simply simplified the process of filing FAFSA forms for students. says.
“Frank did nothing to affect the amount of aid that students would receive if they submitted the FAFSA themselves,” Kantrowitz told an insider. It wouldn’t have led to a doubling of volume.”
He added that Frank was making up numbers “randomly” when describing the amount of help users received.
Javice’s close ties to the media began in 2011 when she was recognized for her role in a startup she founded called PoverUp on Fast Company’s 100 Most Creative People of 2011 list.
Founded as a non-profit organization, PoverUp’s goal was to provide loans to entrepreneurs in poor countries and help lift them out of poverty using small donations from college students.
However, Insider’s investigation found no evidence that PoverUp registered as a non-profit organization. The outlet also said a former director of the company said it didn’t get much attention, contradicting Javice, who said the company had raised a $300,000 loan in 2013.
Javice soon gave up on the idea and went on to found Tapd. Tapd was a company that sought to connect young professionals with job opportunities via his text message.
The company was later renamed Frank after financial difficulties that forced Javice to lay off the entire team at one point. Yet Javice managed to portray her challenge as a teaching moment and frame it as part of her story of ultimate success.
In a 2020 email to the online magazine obtained by an insider, Frank’s publicist described Frank’s story as “miraculous” and said that Javis’ “first company failed after 18 months.” said she still “could be persuaded.” [investors] to fund her next company, Frank. ”
Forbes 30 Under 30:
— Charlie Javis: JP Morgan says it used millions of fake customers to trick them into buying it.
— Caroline Ellison: CEO of Alameda Research, money fraud.
— Elizabeth Holmes: CEO of Theranos, convicted biotech con artist.
— Sam Bankman-Fried: You know him. pic.twitter.com/CUCjlUcEtw— Yuri Gnatyuk ????????? (@ygnatyuk_) January 12, 2023
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