On Monday in a New York court, the creator of a student loan aid startup that J.P. Morgan Chase acquired for $175 million two years ago was indicted on fraud charges and pled not guilty.
Charlie Javice, 31, pled guilty through her attorney to charges of conspiracy, wire fraud, and bank fraud in a federal indictment returned late last week in Manhattan.
U.S. Magistrate Judge Gabriel Gorenstein presided over a video-projected hearing in which Frank’s founder, a resident of Miami Beach, Florida, and her legal counsel and opposing counsel appeared remotely. He said she would have to appear before a judge who would preside over her trial on June 6.
Javice, who is out on a $2 million bond, is accused of lying to J.P. Morgan Chase about Frank’s customer base in order to convince the investment firm to acquire her business. In reality, Frank only had about 300,000 subscribers at the time. Authorities estimated that she would have made $45 million from her deception before her arrest in early April.
Read More: Ex-OpenAI executives raise $450 M for Google-backed Anthropic
The Government Requested 30 Days
The government requested an additional 30 days to “engage in further discussions with counsel about the disposition of this case” in a letter filed in early May, delaying the deadline for filing an indictment against Javice.
Although plea bargains can arise from negotiations of this nature, the indictment served as a warning that the case against a woman featured on Forbes’ 2019 “30 Under 30” list of rising young professionals was headed toward trial.
Her attorney, Alex Spiro, may have reflected the contentious nature of the situation by complaining that prosecutors have not turned over any evidence in the case since the breakdown of talks and the coming of the indictment late last week.
Nothing, he continued, has come to us.
Dina McLeod, an assistant U.S. attorney, said the indictment was recently filed.
“This is a complex case,” she said, adding that prosecutors need time to analyze the many documents that will be given to the defense before trial.
The indictment was very similar to the criminal complaint that was made public at the time of Javice’s detention. She was also accused of wire fraud, bank fraud, and securities fraud, as well as conspiracy to conduct these crimes.
Authorities say that in 2017, Javice established TAPD Inc. under the name Frank to serve as a platform for students to apply for federal financial aid for higher education by filling out the Free Application for Federal Student Aid (FAFSA).
Frank has been accused of defrauding students by promising them financial aid that they did not receive. He has also been accused of using false and misleading information to attract students to his company.
Frank has denied all of the allegations against him. He has said that he is a victim of a smear campaign by his competitors.