Is Frank founder Charlie Javice a genius or a swindler? Jury in $175M JPMorgan fraud trial will soon decide.

• Closing arguments are set for Wednesday in the NY fraud trial of Frank founder Charlie Javice.
• Federal prosecutors say Javice tricked JPMorgan Chase into paying $175 million for her website.
• Her lawyers say JPMC got what it wanted in the deal — Javice herself — then fumbled the ball.

Four years ago, when Charlie Javice began boasting that Frank, her financial aid website, had more than 4 million student users, eyebrows shot up among her co-workers.

"Do we really have 4.25M students?" they chatted behind her back on the office messaging app, Slack, during a team meeting in early 2021. "Is this real?" one slacked, according to government evidence. "Why do I feel like it's so much smaller?"

When a Frank worker joked, "These look like charlie numbers," another agreed: "Charlie is king of finding magic numbers haha."

As early as Thursday, a federal jury in Manhattan will begin weighing fraud and conspiracy charges that carry a potential 30-year prison sentence. The charges allege that Javice, 32, and her top executive at Frank, Olivier Amar, 50, used fake data to trick JPMorgan Chase into buying the website for $175 million.

Jurors will be asked to consider many millions of numbers scattered throughout spreadsheets, emails, WhatsApp texts, and Slack messages surrounding the 2021 deal.

Ultimately, though, a single "Charlie number" — and whether it was magic or merely misunderstood — will be at the center of their deliberations.

That number is 4,265,085.

Prosecutors say it's what Javice ultimately settled on when, on July 8, 2021, she told JPMorgan executives how many individuals had used the website over the previous four years to at least begin filling out a FAFSA, or Free Application for Federal Student Aid.

Javice assured JPMorgan that each of these users had given Frank their first name, last name, email, and phone number, prosecutors said. They said she also told the bank that many of them had additionally given Frank their Social Security numbers, home addresses, dates of birth, and details on their income, cash assets, and investments.

All of this information could be theirs if they purchased Frank, the bank was told — data points it could use to directly market Chase credit cards and checking accounts to students at the start of their lifelong financial journeys.

Prosecutors allege that when the bank asked to verify the impressive number, Javice pushed back, citing user privacy and terms-of-service restrictions.

During daylong meetings on July 12 and 13, 2021, Javice repeatedly assured the bank that the number represented real Frank users from whom the website had collected at least names, emails, and phone numbers.

JPMorgan Chase kept pressing for proof.

So Javice and the bank agreed to a compromise — she would send her 4,265,085 rows of spreadsheet data to a third-party marketing company. The marketing company could review the spreadsheet and assure the bank that the data was all there.

The trouble, prosecutors allege, was that no such spreadsheet existed. They say that only 293,000 users had ever signed up for a Frank account and submitted their names, emails, and phone numbers to the website. Many of these account holders had never started a FAFSA.

Eager to clinch the deal, Javice and Amar were undaunted, prosecutors argued.

According to the indictment against them, the two hired an outside company to create a phony spreadsheet whose 4,265,085 rows would mirror the statistical properties of those 293,000 actual users.

Prosecutors say this massive Excel spreadsheet was created by an outside company in three days for $18,000 and filled with "synthetic data" to clinch the $175 million sale.

"It was all fake," federal prosecutor Micah Festa Fergenson said during Javice's arraignment in April.

The parties signed a merger agreement in early August 2021. The deal closed a month later. Javice received an immediate $21 million and began collecting on her half-million-dollar annual salary and bonus package.

JPMorgan, the country's largest bank, purchased Frank without ever setting eyes on the spreadsheet, nevermind vetting its numbers.

Instead, prosecutors allege, the bank relied on Javice's third-party marketing company, which assured that it had counted the rows of data, and, indeed, they numbered 4,265,085.

After the merger closed, Javice and Amar knew their new bosses would need real numbers so, prosecutors say, they purchased publicly-available data for four million students, including names, emails, and phone numbers, on the open market for $100,000.

When Chase used the data to test-run a marketing campaign, "a lot of the emails were old and didn't work," Fergenson, the prosecutor, said at Javice's arraignment. "Almost nobody clicked through to it. And it was completely unexpected."

A former Frank employee testified Thursday that more than 30% of the emails were invalid. She said only 1% of the people who received the Chase email actually clicked to open it.

Ultimately, the test run using Frank's user spreadsheet — the spreadsheet JPMorgan spent $175 million to access — resulted in 10 people signing up for a Chase checking account.

The bank launched an in-house investigation. The Frank website was taken down. JPMorgan fired Javice and Amar in November 2022 and sued them a month later.

The following April, the US Attorney's Office announced Javice's indictment. On the same day, the Securities and Exchange Commission announced it had filed a civil lawsuit charging her with bank and securities fraud, a case that remains on hold pending the resolution of her criminal case.

They wanted Javice more than her data

In court papers, opening statements, and arguments throughout a monthlong trial, Javice's attorneys have tipped their hand on several defenses that may find their way into closing arguments scheduled for Wednesday.

They've argued that for JPMorgan, the Frank deal was more about acquiring Javice — a promising fintech star and media darling — than her data.

The microfinance entrepreneur had made Forbes' "30 under 30" list and, at age 28, secured a one-on-one meeting with Jamie Dimon, the bank's CEO.

JPMorgan hired Javice as its managing director for student solutions because she was an "incredible young woman," defense lawyer Jose Baez said during opening statements last month.

"They saw something in Charlie, a young female CEO breaking the glass ceiling," Baez, the Florida attorney who successfully defended Casey Anthony, told jurors. "That's what JPMorgan negotiated for, and that's what they got."

The defense lawyers have also argued that Javice could not have intended to deceive JPMorgan because previous to the merger negotiations, she'd repeatedly said in interviews and on the pages of Frank that the website had helped 300,000 students and their families.

And they've argued that when Javice cited that 4-million-user figure, JPMorgan executives misunderstood her.

"The 4.25 million figure was about website traffic based on Google Analytics metrics," her lawyer Kirsten Nelson said in a court filing earlier this month.

Apollo Global Management CEO Marc Rowan testified on Thursday on behalf of Javice that terms like "user," "customer," and "visitor" were generally synonymous.

"A user could casually come and go and absorb Frank content without significant interaction," Rowan, an early Frank investor and board member, said of the millions who had clicked around the website.

Finally, the defense may argue, as they have in court papers, that the bank concocted fraud allegations to fire Javice "for cause" and avoid paying her a $20 million retention bonus.

The defense may argue that JPMorgan killed Frank after an email-blast marketing campaign that failed not because of fraud but because JPMorgan Chase was tone-deaf to Gen Z.

Young people rarely answer emails, Javice witness Jennifer Zeitler, a former Frank marketing manager, told jurors on Thursday. The bank would have had better luck sending out texts instead, she told the jury on Thursday.

"Ninety-nine percent of text messages are read," she testified. Instead, "We were just spamming people."