“There were definitely times where I painted a rosier picture than things truly were,” Frank’s founder and former CEO said months before JP Morgan bought her startup for $175 million.
In 2021, Charlie Javice, the young founder and former CEO of Frank, pulled off a master stroke: Selling her fintech startup to JP Morgan Chase for $175 million. “It’s not every day that an entrepreneur gets her fairytale new beginning (not ending!),” she wrote on LinkedIn at the time.
Just over a year later, JP Morgan’s chief executive Jamie Dimon is under fire for a due diligence process that appears to have missed what the bank now claims was a major red flag about Javice’s business: legions of fake customers. JP Morgan is suing Javice for allegedly tricking it into buying Frank—which promises to simplify the student financial aid application process—by creating a list of more than 4 million college-aged users that don’t exist.
In a lawsuit filed late last year in U.S. District Court in Delaware, the financial giant alleges that Javice enlisted the help of a data science professor to generate an enormous roster of bogus Frank users to impress JP Morgan—when in reality, fewer than 300,000 students were signed up. Javice, who became a managing director at JP Morgan as part of the acquisition, has since been fired and is also suing JP Morgan. Her complaint claims the company “manufactured a for-cause termination in bad faith” and “worked to force Ms. Javice out” to deny her millions in compensation that she was owed.
Meanwhile, banks and investors are scrambling to distance themselves from the 30-year-old founder. After JP Morgan shut down Frank’s website last week, others followed suit: LionTree, the investment bank that ushered the deal, removed its podcast featuring Javice. Ground Up Ventures, which touted Javice’s company as both its first investment and its first exit, yanked Frank from its website and disappeared a Medium post explaining why it backed her. Former Thiel Foundation top brass publicly denied that she’d been awarded and turned down a coveted Thiel Fellowship.
Examination of government documents and public records; reviews of hours of recorded and print interviews; and interviews with more than a dozen people who’ve interacted with Javice professionally or personally reveal her to be an entrepreneur with a grandiose vision of success and a make-it-happen-no-matter-the-cost attitude. Few seem surprised she ended up in this mess.
“This is exactly what she had been doing, what she has been doing all along, and now [she] has gotten caught for it,” one person familiar with Javice told Forbes.
“We all understand the art of the sale, but some of the things that were being said were just inexcusably inaccurate.”
The person, who requested anonymity for fear of professional repercussions, recalled being in early investor meetings with Javice before any product had been built and hearing her tell potential partners that the service already had thousands of students signed up. A second person familiar with Javice also recalled her exaggerations at that time. “We’d all start looking at each other like: This is insanity. You can’t be saying these things,” one of the people told Forbes. “We all understand the art of the sale, but some of the things that were being said were just inexcusably inaccurate.”
This person told Forbes that when those working for her confronted Javice about their concerns, she dismissed them. “Her response was always: ‘Listen, these old people don’t understand, this is how it works, you fake it ’til you make it.’”
During one 2021 podcastJavice described her approach: “Being a founder, I’m obviously skewed towards being overly optimistic—and sometimes that works to your advantage, sometimes it doesn’t,” she told the host of Planet Economics. “And there were definitely times where I painted a rosier picture than things truly were.”
Javice, through her lawyer Alex Spiro, did not respond to repeated requests for comment and a detailed list of questions from Forbes. JP Morgan spokesman Pablo Rodriguez said in a statement that its claims against the founder “are set out in our complaint, along with the key facts” and “any dispute will be resolved through the legal process.” LionTree and Ground Up did not respond to requests for comment.
“She’s Dropping Names”
Javice, who made the Forbes 30 Under 30 list in 2019, grew up in affluent Westchester County, New York, where she rode horses and attended the French-American School of New York. Her father worked at a hedge fund; her mother is a life coach and former teacher. Her brother is chief digital officer at Popeyes. Javice was admitted early to Wharton at the University of Pennsylvania—from which she graduated in just three years—and studied finance and law.
One former classmate who knew Javice socially at Wharton said “she was actually really nice” but something felt off, like she’d often be “name dropping and trying to present a much bigger picture than it was.”
In 2011, as a college freshman, Javice established PoverUp. She hoped to build a grassroots student movement and online platform that would use microfinance for social good and power efforts “to end poverty with the click of a mouse,” per her LinkedIn. (PoverUp’s website has been online since at least 2009, when Javice would have still been in high school.)
PoverUp sought out donations and potential partnerships with investors, social incubators and prestigious schools including Harvard and Chicago Booth. “Charlie has been whoring herself out effectively recently and we have some potentially new and exciting opportunities coming our way,” PoverUp’s then-COO wrote to a PoverUp listserv as things ramped up in 2012. According to dozens of internal PoverUp emails reviewed by ForbesJavice and PoverUp leaders claimed she went to dinner in New York with impact investor Bobby Turner; met in Philadelphia with First Round Capital cofounder Josh Kopelman; and visited the Harvard Leadership Institute. (No one mentioned in the emails responded to requests for comment.) She was also featured in splashy write ups in outlets like Fast Companywhich named Javice to its Most Creative People list.
The buzz around PoverUp also landed Javice an interview in 2012 for the coveted Thiel Fellowship, a two-year program that awards students a $100,000 stipend to build a business or pursue a research project. Javice was pitted against the likes of future Figma cofounder Dylan Field but “took herself out of the running to win because she wanted to stay in school,” according to a Tumblr post shared by her PoverUp team. Aleph partner Michael Eisenberg, a key Frank investor, also said in a 2022 Medium post celebrating the JP Morgan acquisition that “she was selected to be a Thiel Fellow but turned it down.”
Michael Gibson, cofounder of the venture fund 1517 who previously oversaw grants for the Thiel Foundation, had a different recollection of Javice. “She was never offered a fellowship and it bothers me that she is going around saying that,” he told Forbes. “Because of her personality we didn’t trust that she could get started in a real way.”
“She’s dropping names. She’s pretending to know more inside baseball about the tech industry.”
“She’s dropping names,” he added. “She’s pretending to know more inside baseball about the tech industry.” The Thiel Foundation did not respond to a request for comment.
At least one social impact organization that had been touted as a PoverUp partner told Forbes they had not worked together. “Grameen America has not received any funding from PoverUp or Charlie Javice and vice versa,” the group said in an email. “Further, there is no information about this partnership in our CRM system.”
Ultimately, according to the New York lawyer who helped set up the organization, PoverUp was a lofty idea that she could not execute on.
Javice was “very ambitious, very brilliant, very influential,” the attorney, Howard Finkelstein, told Forbes. But PoverUp “was a very grandiose idea, and it didn’t really get that far off the ground.”
“The Future Of Personal Finance!”
After graduating from Wharton in 2013, Javice began work on the edtech business that would ultimately become Frank. The initial idea in 2015 was to build a job-search product, then called Tapd; that evolved into creating an alternative to the FICO credit score, which helps lenders decide whether and how much money to loan prospective borrowers. She quickly hit a major speedbump.
“To secure compliance approval in each state for our product, it would require much more than the $10 million in seed money I was seeking at the time,” Javice explained in an interview with Medium’s Authority Magazine that has since been taken offline by the author. “I fired all my employees—it was the worst thing I’ve ever had to do. A lot of my employees were close friends, and still won’t talk with me to this day.” In another interviewshe described having to let go of nearly a dozen people in June of 2016, including a cofounder, to start over and change the business from serving banking clients to helping students. In another, on the “Persistence 360” podcast, she referenced “navigating being $500,000 in the red and needing to manage how to pay people.”
“You’re fucking with people’s lives.”
People with knowledge of Frank’s beginnings claimed the earlier company ran out of money and Javice stopped paying her staffers. “It became a big thing,” said one of them, who claims to have sat her down and told her: “You’re fucking with people’s lives.” Another told Forbes it was very difficult to get financial information out of her.
As part of Javice’s transition to the next stage of the business, she brought on a new, Israel-based cofounder and CTO, Adi Omesy, in 2016. But the following year, Omesy sued Javice and Frank for failing to pay wages, and failing to deliver on an alleged promise to award him 10% of the equity in Frank after he joined. Javice and Frank were ordered to pay him $35,000 (120,000 Israeli shekel) by a Tel Aviv court in June 2021, though both denied any wrongdoing. Omesy declined to comment. Javice, through her lawyer, did not respond to Forbes’ questions about the case.
In 2017, Javice launched Frank with a new focus on improving the student loan application process and making college more affordable.
“Frank,” as Javice later explained, was meant to conjure up a trustworthy uncle or cousin you can turn to for advice.
“Frank kind of represented that as a name, because it just meant ‘honest.’”
“There aren’t many good actors in the space, and we just wanted to stand for something that was honest, that was transparent, and where people can really feel as if they have someone who’s got their back,” she said in a 2017 YouTube interview with marketer Bill Carmody. “Frank kind of represented that as a name, because it just meant ‘honest.’”
Her ambitions to build the startup into “an Amazon for higher education” or “TurboTax but for financial aid” won her backing from billionaire Apollo CEO Marc Rowan, a lead Frank investor, U.S.-Israeli fund Aleph and other venture firms. (Rowan, through Apollo, and Aleph’s Eisenberg did not respond to requests for comment.) The company eventually wooed even JP Morgan—which acquired Frank for $175 million in late 2021.
Aleph’s Eisenberg had been “blown away” by Javice since the day he met her, when she was just 19, over coffee by Grand Central Station. When the deal went through, he praised the way she’d “built a trusted financial brand, made waves with the U.S. Department of Education that resulted in key policy changes for American families, and scaled the company fearlessly against all odds.”
In 2017, the Department of Education accused Frank of potentially misleading customers to believe Frank was affiliated with the U.S. government, according to documents reviewed by Forbes. (As part of a 2018 settlement, Frank was forced to change its web address and make clear it was not an official government partner.) Javice, through her lawyer, Spiro, did not respond to a request for comment about the department’s complaint. But Spiro told Insider the settlement was related to “a trademark dispute over a trade name. Nothing more.”
In 2020, after bipartisan members of Congress called on the FTC to investigate Frank’s “deceptive practices”—worried that “Frank is creating false hope and confusion for students… [and] may be using the data collected from misled students to make a profit”—the agency sent Frank a warning letter, claiming the company could be misleading students about accessing coronavirus relief funds. Javice, through her lawyer, did not respond to a request for comment about the FTC letter.
Got a tip about Frank or JP Morgan? Or other stories we should know about? Reach out to Alexandra S. Levine at alevine@forbes.com or (310) 526–1242 on Signal/WhatsApp, and Iain Martin at iain.martin@forbes.com.
Others in the education industry also appeared to have concerns about Frank. A New York Times op-ed penned by Javice in 2017 was later amended with a 116-word correction, citing errors with the way Javice described the Free Application for Federal Student Aid process that Frank promised to make less cumbersome.
“Their claims that you could complete the FAFSA in four or five minutes were not exactly true,” said college financial aid expert and Forbes contributor Mark Kantrowitz, who also operates a free website about student finance. Frank claimed in its own marketing that it could file FAFSA in seven minutes. “It was a little bit faster because they were dropping questions from the FAFSA and the problem is that those are important questions for some college-bound students.”
Kantrowitz noted other concerns as well. Frank’s financial aid application stripped out questions crucial to aid determinations, and its financial aid appeal service, a paid feature, included only generic information about students. “Financial aid administrators shared these letters and said this is ridiculous, this is not a real appeal.”
Still, Javice had pitched investors—and investors listened.
“We’ve seen high take rates. And randomly, we haven’t seen fraud yet.”
“I’m sitting there pitching it, and the other tech investors are looking at me like I have ten heads… and Mark [Rowan] goes, ‘The future of personal finance!’” she told Forbes in a previously unpublished 30 Under 30 interview from late 2018. “It’s been awesome, and we’ve seen high take rates. And randomly, we haven’t seen fraud yet.”
Javice said in the Forbes interview that by late 2018, Frank had helped 300,000 students get $7 billion in financial aid, calling it “an awesome new financial product that’s starting to scale.” In early 2021, the company changed its website, claiming its 350,000 students had become 4.25 million. And by the time JP Morgan acquired it later that year, Javice said is LinkedIn that Frank had become “the leading and fastest growing college financial planning platform” and helped “over 5 million students at over 6,000 colleges.”
These soaring numbers would become core to the allegations in JP Morgan’s lawsuit against Javice and Frank’s former chief growth officer Olivier Amar, who also joined the bank as part of the acquisition. The lawsuit details an alleged scramble by Javice and Amar to provide student data to back up questions from JP Morgan’s due diligence team. Just two days after receiving a request for more information on Frank’s supposed 4.25 million customers, Javice allegedly asked a data science professor to create a fake student list, using synthetic data, that was then handed over on August 5, 2021, according to the lawsuit.
The lawsuit also includes internal Frank emails allegedly sent to Javice by her investment bank, LionTree, that pushed her to clarify “mislabelled data” that she’d shared in talks with a rival bidder for Frank. After getting the correct information about Frank’s user traffic, the suit said, that company declined to move forward.
Both Javice and Amar have since been fired from JP Morgan. Javice now lives in Miami, where she purchased a $1.4 million condo—before the age of 30—the year that JP Morgan acquired her company. (To buy it, she took out a $1 million mortgage with JP Morgan.) As for Amar, his LinkedIn says he is simply “enjoying what comes next.”
“[Startup founders] always try to present a version of the story that paints the best possible picture of what we’re doing at any point in time—and that means you can choose your points in time, you can choose the data you’re looking at, and you can choose how you frame it,” the former Wharton classmate, who is also a startup founder, told Forbes. “But you can’t change your data. You can’t make up data. You can’t lie.”
Sue Radlauer and Jeff Kauflin contributed reporting.
MORE FROM FORBES
MORE FROM FORBESJP Morgan Says Startup Founder Used Millions Of Fake Customers To Dupe It Into An AcquisitionBy Alexandra S. LevineMORE FROM FORBESTikTok’s Parent ByteDance Pushes Into Payments With Help From J.P. MorganBy Alexandra S. LevineMORE FROM FORBESFTX Secretly Channeled A $50 Million Loan To Its Bahamian Bank Through An Executive’s CompanyBy David JeansMORE FROM FORBESChatGPT And AI Will Fuel New EdTech BoomBy Emma Whitford
