Wharton 2013 graduate Charlie Javice, who founded the startup Frank, is being sued by JP Morgan.
Javice founded Frank in 2016. The startup aimed to help the students navigate the federal financial aid application process and negotiate with colleges for more financial aid.
The lawsuit, which was filed late last year, alleges that Javice lied about the number of users to inflate his purchase price. JP Morgan acquired the company for $175 million in 2021. JP Morgan claims Javice created more than 4 million fake customer accounts when Frank actually had fewer than 300,000 users, according to Forbes.
previously saying The Daily Pennsylvanian in 2018 that Frank founded to make higher education more affordable after his own struggles renegotiating financial aid at Penn.
“It’s exhausting, it’s emotional,” Javice said in 2018 of her and her mother’s experience working with Penn’s financial aid office.
At Penn, Javice was involved with Wharton’s Social Impact Initiativeas well as his Entrepreneurship Center. In addition, he founded the non-profit organization PoverUP, a microfinance and investment platform for students to alleviate poverty. She previously spoke to the Wharton Global Youth Program about both PoverUp Y Frank.
Frank has previously made misleading statements, which have led to government scrutiny.
In 2018, Frank settled with the federal government over allegations that the startup was misrepresenting its ties to the Department of Education, Insider reported. Javice told the DP in 2018 that Frank’s main investor was Marc Rowan, a 1985 Wharton MBA graduate.
In 2020, bipartisan members of Congress wrote a letter to the Federal Trade Commission saying Frank was creating confusion among students by announcing a non-existent universal application for COVID-19 pandemic-era student aid funds, according to to CNBC.
Javice was recognized at the Forbes 30 Under 30 finance list in 2019. Javice was named Managing Director of JP Morgan, overseeing student-focused products at Chase, after Frank was acquired by JP Morgan in 2021.
Following JP Morgan’s acquisition of Frank, the bank sent a test marketing campaign to Frank’s client list and had “disastrous” results. according to the complaint. JP Morgan later discovered the invention of fake users after investigating poor returns from 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 to create fake client accounts, Forbes reported. reported.
Javice joins 30 other Forbes under 30 millennials charged or convicted of fraud, including FTX’s Sam Bankman-Fried and Caroline Ellison and Theranos’ Elizabeth Holmes.