Last Update: January 16, 2023, 19:08 IST
It all started with Frank, 25, the founder of Javis, a platform that aimed to speed up and simplify the application process for student loans, in 2016. (Credits: Reuters)
With Frank being acquired by JPMorgan Chase, Javis becomes a managing director at Giant.
A young woman with a bright business model, fooling an established finance giant, becoming embroiled in a court case, and garnering widespread media attention – you might imagine this is the epitome of Anna Delvey’s story. Summary! Not really, but close. This is the story of Charlie Javis. The Wharton School graduate conned famed financial services provider JPMorgan Chase into buying his student aid platform, Frank, for $175 million. his trick? Details of 4.6 million customers are being pulled out of the air.
It all started with Frank, 25, the founder of Javis, a platform that aims to speed up and simplify the application process for student loans, in 2016. Their application was supported by big names like Mark Rowan and prominent venture backers. Chegg, Gingerbread Capital and SWAT Equity Partners. In 2019, Javis said that their app was serving 300,000 people. By 2019, JPMorgan Chase acquired the start-up, it claimed the number of users was above 5 million.
With Frank being acquired by JPMorgan Chase, Javis became a managing director at Giant. He received close to $10 million for the merger and negotiated a $20 million retention bonus for the future. Frank’s chief development officer, Olivier Amar, received about $5 million from the deal.
Behind closed doors, Javis paid a data science professor at a New York City Area College $18,000 to access the data of some Frank users and create 4.265 million fake customer accounts. JPMorgan Chase alleges that it was validated by a third-party vendor. Amar, too, made himself useful by purchasing a data set of 4.5 million students from ASL Marketing for $105,000.
The deal done, JPMorgan Chase wanted to get down to real business. They asked for Frank’s client list so they could start marketing their products and services to those students. After some resistance, citing privacy concerns, the two sent the data obtained from ASL and Enformation. JPMorgan Chase started working by sending 400,000 test emails. They were hit hard with disastrous results. They could only send a quarter of emails, of which only one percent were opened.
Soon, JPMorgan Chase discovered that the students did not exist. He fired Amar in October and Javis in November 2022 and filed a lawsuit against them. The evidence showed “he committed fraud upon perjury in order to defraud. Javis and Amar used fake customer lists and other knowingly false merger agreement representations to fraudulently induce JPMC to enter into the merger,” Sue said.
Javis also filed a lawsuit against JPMorgan Chase. Her complaint stated that the bank failed to harness the potential of Javis and Frank, and instead pursued “poorly designed business plans” focused on “Frank’s historical customers”. She alleged that “Chase mismanaged his investment from the start, and decided that he would rather withdraw the investment than work on it.”
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