2013 Wharton graduate Charlie Javice, who founded the startup Frank, is being sued by JP Morgan.
Javice founded Frank in 2016. The startup aimed to help students navigate the federal financial aid application process and negotiate with colleges to receive more financial aid.
The lawsuit, which was filed late last year, alleges that Javice lied about the number of users to inflate its purchase price. JP Morgan acquired the company for $175 million in 2021. JP Morgan claims that Javice created over 4 million fake customer accounts when, in reality, Frank had fewer than 300,000 users, according to Forbes.
Javice previously told The Daily Pennsylvanian in 2018 that she founded Frank to make higher education more affordable after her own struggles re-negotiating financial aid at Penn.
“It’s grueling, it’s emotional,” Javice said in 2018 about her and her mother's experience working with Penn's financial aid office.
At Penn, Javice was involved with Wharton’s Social Impact Initiative, as well as its Entrepreneurship Center. Moreover, she founded the nonprofit PoverUP, a microfinance and investment platform for students to alleviate poverty. She has previously spoken to the Wharton Global Youth Program about both PoverUp and Frank.
Frank has previously made misleading statements, which have led to government scrutiny.
In 2018, Frank settled with the federal government over accusations that the startup was misrepresenting its ties to the Department of Education, Insider reported. Javice told the DP in 2018 that Frank’s lead investor was 1985 Wharton MBA graduate Marc Rowan.
In 2020, bipartisan members of Congress wrote a letter to the Federal Trade Commission saying that Frank was creating confusion for students by advertising a nonexistent universal application for COVID-19 pandemic-era student relief funds, according to CNBC.
Javice was recognized on the Forbes 30 Under 30 finance list in 2019. Javice was appointed managing director of JP Morgan, overseeing student-focused products at Chase, after JP Morgan acquired Frank in 2021.
Following JP Morgan's acquisition of Frank, the bank sent out a test marketing campaign to Frank's customer list and received “disastrous” results, according to the complaint. JP Morgan then discovered the invention of fake users after looking into the poor returns of the marketing campaign.
Frank’s Chief Growth Officer Olivier Amar and a New York City-based data science professor are also named in the JP Morgan complaint for helping create the fake customer accounts, Forbes reported.
Javice joins other Forbes 30 Under 30 millennials accused or convicted of fraud, such as Sam Bankman-Fried and Caroline Ellison of FTX and Elizabeth Holmes of Theranos.