Charlie Javis, founder of student finance startup Frank, said on Friday that JPMorgan Chase & Co. was acquired by the bank's $175 million company. was found guilty of fraud.
The verdict was delivered by Manhattan federal ju trial after six weeks of trial It ended in just six hours of deliberation.
Javice, 32, was found guilty of multiple counts, including bank fraud, after prosecutors allegedly produced data to inflate Frank's user base.
Javice claimed that her platform has over 4.25 million users, but has proven that the actual number is close to 300,000.
Prosecutors said the deception was important because JPMorgan bought the startup in 2021.
Visibly shaken by the results, Havis sat quietly as the verdict was read.
Her co-defendant, Olivier Amal, was also found guilty, and looked down and shook her head. Friends and family members sitting in court looked surprised.
The verdict will be made at a later date.
Javice faces up to 30 years in prison with the most serious charges, but legal experts suggest that she is likely to receive a significantly shorter sentence.
The verdict shows a dramatic fall for Havice, once celebrated as a rising star of Fintech.
Frank was launched in 2016 with a mission to simplify the university's financial aid process.
Frank aimed to help students navigate the free Federal Student Aid (FAFSA) application, streamlining the application process and insisting that it would improve accessibility.
Javice's innovative approach has won her spot on the prestigious list Forbes' 30 under 30, etc. 2019.
Praise for its student-friendly tools and aggressive growth strategies, the company quickly attracted public attention.
The relationship began to be clarified in the second half of 2022 when the bank filed a lawsuit against Javice and accused the company of severely misrepresenting its indicators.
The complaint alleged that she and Amar hired a data science company to generate a fake list of users to support allegations that bulged during due diligence.
The Justice Department later filed criminal charges, including wire fraud, securities fraud and conspiracy.
Javice, arrested in April 2023 and released on a $2 million bond, pleaded not guilty during trial and maintained her innocence.
Her legal team argued that JPMorgan had access to accurate data and failed to carry out proper due diligence prior to the transaction.
However, prosecutors described a calculated scheme to mislead investors and ensure favorable transactions through fraud.
The witness testified that he was asked to produce fictitious information, but the emails and internal documents presented during the trial painted a clear picture of intentional misconduct.
