by Brian Neeley
The largest bank in the United States, JPMorgan Chase & Co., is accusing young Jewish entrepreneur Charlie Javis of defrauding millions of potential customers into buying his company for $175 million.
In a lawsuit filed by the bank last month, it accused the once-promising CEO on Forbes’ 30 Under 30 list of inflating the client list of his college financial planning startup, Frank, which was acquired by JPMorgan in September. had bought. 2021.
The bank accused Olivier Amar, former chief development and acquisitions officer at Javis & Frank, of defrauding nearly four million customers and creating millions of fake profiles on the platform, hiring a data science professional to hide his actions.
“To cash in, Javis decided to lie, including lies about Frank’s success, Frank’s size, and the depth of Frank’s market penetration,” the suit read.
In turn, Javis’s attorneys have denied the allegations against their client and have filed a lawsuit against JPMorgan for allegedly trying to avoid paying him.
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The now 30-year-old founded Frank in 2016, when she was just 24. With a stated goal of helping college students fill out financial aid forms and save billions of dollars in tuition, Frank and its young founder captured the world’s attention.
But according to JPMorgan, it was mostly a hoax, or at least an exaggerated success story. The bank that Frank claimed to have 4.25 million college students as customers by the end of 2021 instead never had more than 250,000.
According to a New York Times report, despite repeated warning signs, Javis continued to enjoy sympathetic coverage from major news outlets including Forbes, Fast Company Magazine, Medium, and Insider.
It was noticed by the US Department of Education soon after Frank was founded. In its early days, the company offered financial assistance to college students for their tuition on a website called frankfafsa.com.
FAFSA stands for Free Application for Federal Student Aid and is a registered trademark that was used by Frank without permission, the department said at the time. As part of a settlement agreement reached in 2018, Frank handed over the web address to the department and switched to an alternate web address.
Around the same time, Adi Omesi, an Israeli co-founder of Frank, sued Javis for wage theft in Israel and received compensation.
But this did not stop his overwhelmingly positive media coverage.
In 2018, Business Insider ran an article titled: “A 26-year-old founder has a solution to what Bill Gates calls an ‘unnecessary roadblock’ in college – and his startup is helping students get around thousands of tuition fees.”
In the article, Javis claimed that Frank saved its users an average of $28,000 on tuition.
However, in an article published by the outlet after JPMorgan’s lawsuit against Javis, it cited student-aid expert Mark Kantrowitz as saying that Frank was simply simplifying the process for students to fill out the FAFSA form.
Kantrowitz told Insider, “Frank did nothing that would have affected the amount of aid the students would have received if they had filed the FAFSA.” “This does not double the amount of financial aid.”
He added that Frank was making up figures “at random” when describing the amount of help his users had received.
Joyce’s close relationship with the media began in 2011, when she appeared on Fast Company’s 100 Most Creative People of 2011 list for her role in an earlier startup she founded called PowerUp.
Founded as a non-profit, PowerUp’s stated goal was to provide loans to entrepreneurs in poor countries and help lift them out of poverty using small contributions made by college students.
But an internal investigation found no evidence that PowerUp was registered as a nonprofit. The outlet cited a former board member of the company as saying it never gained much traction, contradicting Joyce, which said in 2013 that the company had raised $300,000 in debt.
Javis soon abandoned the idea and went on to found Tapd, a company that sought to connect young professionals to job opportunities via text messages.
The company was later rebranded as Frank’s after financial difficulties, which at one point forced Javis to fire his entire team. Still, Javis characterized the challenges as a teaching moment and framed it as part of his eventual success story.
In an email addressed to an online magazine in 2020 and obtained by Insider, Frank’s public relations representative described Frank’s story as “miraculous” and said that Javis’s “first company failed after 18 months” and that he is still “persuading I succeeded. [investors] to fund his next company, Frank.
