JPMorgan Chase claims it was defrauded by a 30-year-old entrepreneur who lied about the number of college kids using Frank, the financial planning site the mega-bank bought for $175 million.
JPMorgan Chase claims that Charlie Jewitt, who is on Forbes’ 30 Under 30 list in finance for 2019, convinced his bank that Frank’s is “a business deeply engaged in the college-aged market segment with 4.265 million customers.” According to the lawsuit filed on December 22, read.
“Instead, he bought a business with less than 300,000 customers,” according to the explosive lawsuit filed in federal court in Delaware.
Frank’s backers include billionaire Mark Rowan, CEO of Apollo Global Management, who is listed as the site’s lead investor, according to Crunchbase.
Olivier Amar, another Javice and Frank executive, hired a data scientist who was paid $18,000 to compile a list of fake names and addresses passed off as clients, the lawsuit alleges. According to the lawsuit, the scientist used computer-generated data to create a fake user database that included information such as customer names, dates of birth and colleges they attended.
Javice and Amar, the chief growth officer, allegedly paid $26 million as a result of the bank’s acquisition of Frank — money JPMorgan said they “couldn’t get because of their bad behavior.”
Frank marketed itself as a site that made it easy for prospective college students to fill out federal financial aid forms.
JPMorgan claimed that Javice had significantly increased the number of customers using the site when it approached the bank about a potential acquisition in the summer of 2021.
“Instead of revealing the truth, Javice first retreated [JPMorgan’s] It requested, claiming it could not share its customer list due to privacy concerns,” the bank said in a legal filing.
“Then [JPMorgan] insisted, Javice chose to invent several million Francs customer accounts out of the whole cloth.
JPMorgan filed suit against Javice days after filing the lawsuit, claiming the bank owes millions of dollars in legal fees stemming from an internal investigation last spring.
Javice claims he was fired as head of student solutions by the investment bank in November. He claims he was released to cover a $20 million bonus payment he was owed by JPMorgan.
His attorney, Alex Spiro, argued that JPMorgan’s lawsuit was “nothing more than a cover-up.”
“After JPM rushed to acquire Charlie’s rocket ship business, JPM realized they couldn’t work around existing student privacy laws, misbehaved and then tried to reverse the deal,” Spiro told The Post in an email.
“Charlie blew the whistle and then sued.”
Spiro also represented Elon Musk in his lawsuit alleging that Twitter misrepresented the number of user accounts on its platform when Musk agreed to buy the company for $44 billion last year.
A JPMorgan spokesman scoffed at Spiro’s claims, telling the Post that Javice “was not and is not a whistleblower.”
“Our legal claims against Ms. Javice and Mr. Amar are outlined in our complaint along with the main facts,” the spokesperson said.
Javice and Amar deleted their Twitter accounts. They were not immediately available for comment.
In a Crain’s New York Business “40 Under 40” profile, Javice likened Frank to the way TurboTax’s website works for student loans does for Form 1040s.
Javice said she was inspired to launch Frank after her experience putting together scholarships, grants and family support to attend the prestigious Wharton School at the University of Pennsylvania.