A former Wharton School graduate is at the center of a massive bank fraud case involving JPMorgan Chase. The bank was allegedly tricked into buying a worthless company for a whopping $175 million.
The $175 Million Scam
In 2021, JPMorgan Chase purchased “Frank,” a financial aid app founded by Charlie Javice. Javice, only 24 at the time, was subsequently hired as a managing director. However, her time at JPMorgan was short-lived. Accusations of fraud led to her dismissal, and now she’s facing serious charges.
Fabricated Data and a Paid Friend
The core of the alleged fraud involves fabricated user data. Prosecutors claim Javice paid a friend, Adam Kapelner, a fellow Wharton alum and data scientist, $18,000 – double his usual rate – to create fake user data. Kapelner testified that Javice provided him with a file showing Frank had far fewer real users than she claimed. He then spent hours generating millions of lines of code representing fake users, unaware of the intended use.
Covering Her Tracks
After joining JPMorgan, Javice allegedly hired Kapelner again to integrate data from another marketing company into Frank’s database. Prosecutors believe this was an attempt to further conceal the fabricated user numbers.
Facing Serious Charges
Javice is now charged with securities fraud, wire fraud, bank fraud, and conspiracy. She faces a potential 20-year prison sentence. The case highlights the risks involved in large acquisitions and the potential for sophisticated fraud schemes.
