Unlock the publisher’s digest free
Roula Khalaf, editor -in -chief of the FT, selects her favorite stories in this weekly newsletter.
The presumed close relations of JPMorgan Chase with prosecutors will be a key objective in the defense strategy of a young entrepreneur, Charlie Javice, planned to be tried this week for criminal charges that she fraudulently incited the American bank to buy her business.
Javice’s defense team maintains that the lender has essentially felt the buyer’s remorse and exploited the government to transform a commercial dispute into a criminal case. Javice, 31, was arrested two years ago for fraud on the sale of $ 175 million in JPMorgan in 2021 of his company Frank, who supported students who are asking for financial assistance.
His legal team accused JPMorgan of having exerted enormous power over the prosecutors in his investigation, alleging that such coordination was prior to the pursuit of the Bank against Javice for fraud.
“The government worked intimately with JPMC, despite the participation of the bank’s reputation in the case of the case as a quacker,” said the Javice team in a file last month.
In a refutation file, the accusation argued that it had “conducted an in -depth and independent investigation into the allegations in this case” and accused the Javice team of lightening “a smorgasbord of government unconscious”.
New York prosecutors accuse Javice and his co-defender, Olivier Amar, the former director of growth of Frank, of paying a scientist to make accounts to show 4.25 million users when the real figure of Frank was 90% less. The trial is expected to start on February 18.
An Amar lawyer, who denied any reprehensible act, did not respond to requests for comments.
“There will be a vigorous defense and a few surprises,” said a spokesperson for the Javice’s legal team led by Jose Baez, who previously represented Harvey Weinstein.
“Do a Google search and focus on the July 2021 calendar and I think you will find about two dozen articles of all kinds on Frank and Charlie to talk about its users registered in several hundred thousand. It was there in public. »»
Javice’s defense can complete a distinction in the definition of a student as “registered” – Business Insider reported in July 2021 that it declared to the publication that Frank “serves more than 5 million households”.
The case Dragira one of the most embarrassing episodes in the recent history of JPMorgan – while the agreement was without consequence for a bank which achieved nearly 60 billion in profits last year, CEO Jamie Dimon, who made his name in part for his sense of transaction, labeled him as a “enormous error”.
He also renewed attention to the charismatic founders promising revolutionary companies, following high -level fraud tests for Elizabeth Holmes, Sam Bankman Fried and Trevor Milton. All were then sentenced and were sentenced to several years in prison.
The prosecutors found texts between Javice and Amar discussing the conviction of Holmes, the founder of the blood test company Theranos. Javice wrote in Amar de Holmes: “I hope it is a light conviction. . . Investors should be blamed to let a 19 -year -old become a thug. ”
Javice started what later became known as Frank in 2017, four years after graduating from the University of Pennsylvania. The website offered to students who help request financial assistance.
Frank finally attracted the financing of Aleph, an Israeli venture capital company, as well as the billionaire investor Marc Rowan from Apollo Global Management, also a former student of Penn. Javice appeared on podcasts to promote Frank for intermediate and low -income families seeking to send their children to university.
JPMorgan looked for Frank for his relationship with young Americans with whom he could shine banking products. Prosecutors allegedly alleged that Javice was directing a program to ensure that her business seems to have a more critical mass to attract a potential buyer.
The investment bank, Liontree, led an auction in 2021 for Frank, in the midst of inflated public and private market assessments. JPMorgan leaders said that the company’s assessment was supported by Frank users that JPMorgan came to believe that it was in millions.
“What we buy is a team, a brand, an algorithm which, together and without millions of relations with customers, deserves a small fraction of the purchase price,” a JPMorgan frame to another on another Project Finland, the internal code name The bank assigned to Frank.
JPMorgan paid Javice $ 21 million for his frank participation, with the offer of another $ 20 million retention bonus that has never been paid.
Since his arrest in April 2023, Javice has been free from a bond of $ 2 million, obtained against her apartment in Miami. The court approved its request to remove an ankle instructor so that it can continue a job as a fitness instructor.
Jpmorgan filed a distinct civilian complaint against Javice. The trial is expected to last four weeks.
