Charlie Javice, the tech startup founder who lied about her financial aid company and sold it to JPMorgan Chase for $175 million, was sentenced to seven years in prison on Monday.
Judge Alvin Hellerstein in Manhattan federal court said he felt the federal government’s suggested sentencing of 12 years in prison was too steep, and sentenced Javice to 85 months, or just over seven years.
“My job is to sentence people not because they are bad, but because they have done something bad. You are a good person who has done bad things. I have to punish you. Markets require honesty. It’s Biblical. Yours was not an honest measure,” Hellerstein told Javice, according to the Inner City Press.
She was convicted of defrauding America’s largest bank in March following a five-week trial in New York City.
Javice, 33, founded Frank in 2017, a startup that promised to simplify the process of filling out the Free Application for Federal Student Aid.
The company claimed to be revolutionizing the way college students apply for aid, boasting that it could help financially needy students get access faster, in return for a few hundred dollars in fees. Javice received praise for simplifying college financial aid for students and parents, even earning a spot on Forbes magazine’s “30 under 30” list in 2019.
However, Javice fraudulently claimed that the company had over four million clients. In fact, Frank only had about 300,000 users at the time.
JPMorgan was interested in acquiring Frank in part because of the potential it saw in the startup’s supposedly long list of satisfied clients. The bank believed those future college graduates could potentially be sold on the idea of a lifelong partnership with the financial institution.
But after buying the company, JPMorgan said it found evidence that Javice had lied about the number of customers Frank had.
“The sole source of value in Frank was its purported relationships with millions of college-age students. Those millions of relationships with students turned out to be illusory and, as a result, so too was Frank’s value,” prosecutors previously said, according to ABC News.
While federal prosecutors argued Javice deserved 12 years in prison, her lawyers argued for a shorter term, claiming her crimes were a “singular lapse in judgment at age 28,” according to ABC.
The defense argued that the company “helped real families achieve real dreams — first-generation Americans, children of immigrants, young people from underserved communities who saw college not as an entitlement but as a distant hope made suddenly possible.”
The defense also cited a “chorus of support” from over 100 people who submitted letters to the court on Javice’s behalf.
Javice had pleaded not guilty and is expected to appeal her conviction, according to Reuters.
This is a breaking news story, check back for updates…
