NEW YORK (AP) — Charlie Javice, the founder of a startup that sought to streamline financial aid applications, has been sentenced to over seven years in prison for defrauding JPMorgan Chase by exaggerating her company’s customer base.
Javice, 33, was sentenced in Manhattan federal court following her March conviction for conspiracy and fraud. Judge Alvin K. Hellerstein noted that she engaged in a “large fraud” by misrepresenting that her firm, Frank, served over four million customers when the actual number was fewer than 300,000.
During the sentencing hearing, the judge acknowledged Javice's charitable contributions but emphasized the severity of her fraudulent actions. Defense attorney Ronald Sullivan pleaded for leniency, contrasting Javice’s situation with that of Elizabeth Holmes, the disgraced founder of Theranos.
Prosecutors sought a lengthy prison sentence, arguing that Javice acted out of greed when she falsely inflated the value of her company in order to sell it to JPMorgan for $175 million.
“She had an opportunity to profit by lying and she took it,” said prosecutor Micah Fergenson. In response, Javice expressed deep regret for her actions, acknowledging the consequences they brought upon her and others.
The judge criticized JPMorgan for its oversight failures while maintaining that Javice’s conduct would be appropriately punished. Sullivan argued the bank rushed the acquisition fearing that another firm might acquire Frank first.
Javice, who lived on $2 million bail since her arrest in 2023, was previously recognized as a rising tech star. Her startup was designed to simplify the Free Application for Federal Student Aid process, a vital tool for students seeking financial assistance for higher education.
Javice’s case is emblematic of issues in the startup culture, which has seen several high-profile executives facing legal challenges over fraudulent practices in recent years. The sentence imposed reflects a broader judicial message that fraud in entrepreneurship will meet with serious consequences.
