JPMorgan deal worth $175 million leads to Frank founder's criminal charges

Charlie Javice, the founder of Frank, a platform to help students with college financial planning, was charged by the Justice Department on Tuesday with defrauding JPMorgan Chase out of $175 million. 

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Federal prosecutors for the Southern District of New York have indicted Javice, 31, on charges of "falsely and dramatically" inflating the number of real customers Frank had in an attempt to "fraudulently induce" a bank to acquire Frank's startup business. It is estimated that she could profit from the alleged deception by over $45 million, they said. 

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She is one of the fastest-rising technology stars, once named one of Forbes' 30 Under 30, and was arrested in New Jersey on Monday night and is expected in court on Tuesday afternoon.

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A total of four counts have been filed against her. The charges include one count of conspiracy to commit bank and wire fraud, one count of wire fraud involving a financial institution, one count of bank fraud, and one count of securities fraud. There are three charges that each carry a maximum prison sentence of 30 years for each of them. 

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It was also announced on Tuesday that the Securities and Exchange Commission has also filed suit against Javice for fraud in connection with the alleged scheme. 

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As of now, neither JPMorgan nor Jarvice's attorney, Alex Spiro, has responded to a request for comment. 

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The charges come months after JPMorgan filed a lawsuit against Jarvice alleging they had been deceived into believing Frank had more than four million customers as a result of her deception. The startup had fewer than 300,000 customers in reality, according to the lawsuit filed by JPMorgan. 

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It was announced in January that the bank had shut down the startup. 

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U.S. Attorney Damian Williams stated in a statement that the arrest should be a warning to entrepreneurs who knowingly lie to advance their businesses, that their lies will catch up with them, and that this Office will hold them accountable for putting their greed above the law.