Charlie Javice in Court for Alleged $175 Million Fraud Against JP Morgan
The trial of Charlie Javice will begin in lower Manhattan on Feb. 18.
Charlie Javice is finally getting her day in court. On February 18, the millennial founder will try to rebut criminal allegations that she lied to JPMorgan Chase as part of a ploy to get the nation’s biggest bank to buy her startup for $175 million.
The criminal trial, which will take place in lower Manhattan, caps a stunning fall from grace for Javice. In 2021, she was riding high as a media darling who sold her startup, Frank, to JPMorgan Chase after touting it as the “fastest growing college financial planning site.” (You can read Fortune's full story of Javice and JPM here.) In a press release announcing the acquisition, the bank said Frank served five million students at more than 6,000 colleges across the country.
Months after the deal closed, however, JPMorgan feared they had been duped about the size of Frank. The realization came after the bank sent marketing emails to a batch of 400,000 supposed Frank customers. Only 28% of the emails were delivered, and just 1.1% were opened, according to JPMorgan Chase’s lawsuit against Javice. The bank alleged that Javice, along with codefendant Olivier Amar, Frank’s chief growth officer, used a data scientist to create millions of fake customer accounts that it used to dupe JPMorgan Chase. The bank ended up shutting down the Frank website in January 2023, just weeks after suing Javice in Delaware district court.
In April 2023, the DOJ and the Securities and Exchange Commission each filed complaints against Javice, who faces criminal charges including conspiracy to commit wire and bank fraud, wire fraud, and bank fraud. Each of which carries a maximum sentence of 30 years in prison. She was also charged with one count of securities fraud, which carries a maximum sentence of 20 years in prison.
Javice has since been free on a $2 million bond that was secured by her Miami Beach condo and co-signed by her mother and father. Late last year, she convinced Judge Alvin Hellerstein, who is overseeing her case, to remove a clunky 24-hour ankle bracelet she was required to wear because it “impeded her work as a fitness instructor,” according to court filings.
Former Frank exec may testify against Javice
Javice’s trial is expected to last three to four weeks with opening statements anticipated on Feb. 20.One former prosecutor described Hellerstein, who is 91, as liberal and a good judge to draw for defendants. “Everyone loves him, he’s great,” they said. In September, Hellerstein denied Donald Trump’s attempt to move his hush-money case to federal court.
Unlike securities fraud or insider trading, Javice’s case is simple because it focuses on actual people and what they might have done to get money. “It centers around the fact of whether [Javice] knowingly lied about this company that she was trying to sell,” said the ex-prosecutor, who declined to speak on the record.
There is one big bump in Javice’s defense strategy—Amar, Javice’s codefendant, will present an “anticipated antagonistic defense,” according to a Jan. 21 letter from Amar’s attorneys to Hellerstein.
This means Amar will likely turn on his former boss, which prompted Javice last month to ask to be tried separately. Hellerstein, however, denied Javice’s bid to sever her trial from Amar. Javice’s spokesman maintained that her motion to sever is typical in these types of cases and held no malice. “It is common for cases with multiple defendants to sever their cases not only to preserve the issue for appeal but also for a cleaner trial,” a different attorney said.
Javice and Amar are also trying to have several expert witnesses testify at trial, including an M&A law professor as well as a professor of electrical and computer engineering and computer science. Prosecutors are opposing the expert witnesses, claiming Javice and Amar are trying to “improperly shift blame to the victims in this case,” according to a Jan. 13 court filing. Hellerstein has yet to rule on the issue.
Star lawyer drops out
Javice has put together a top defense team, but it will be missing one big name.Alex Spiro, the well-known celebrity defense lawyer, is no longer involved with Javice’s defense, her spokesman confirmed. Spiro, a former prosecutor who is now with law firm Quinn Emanuel Urquhart & Sullivan, has represented several celebrities including Jay-Z, Elon Musk and Alec Baldwin. He led Javice’s defense when the Department of Justice charged her with four counts of fraud in April 2023. Spiro is still listed as part of her team of attorneys, but Javice has “decided to work with another lawyer to go to trial with,” the spokesman said.
Spiro could not be reached for comment.
Javice’s defense team still has a lot of star power. Jose Baez, a Florida attorney who successfully defended Casey Anthony, is serving as Javice’s primary lawyer, lead attorney and lead trial attorney, with Ron Sullivan, a Harvard law professor, acting as co-counsel, her spokesman said. Baez has experience with white collar cases, having defended David Demos, a former Cantor Fitzgerald managing director and Mark Nordlicht, the founder of Platinum Partners, who were each accused of bond fraud in separate trials. (Demos was found not guilty, while Nordlicht was convicted but sentenced to six months of home confinement.) Baez is best known for defending Anthony, who in 2011 was found not guilty of killing her two year old daughter.
For his part, Sullivan has a reputation for taking on cases that are considered impossible, where the defendants are written off as having no chance—and sometimes prevailing. In 2017, Sullivan secured an acquittal in the double murder case of Aaron Hernandez, the former New England Patriot football player. Sullivan was part of the defense team for Demos and Nordlicht, who was acquitted of the five most serious securities fraud counts against him.
Along with Baez, Sullivan was also part of Harvey Weinstein’s defense team for a time. Weinstein is the powerful Hollywood producer whose 2020 felony sex crime conviction was overturned last year on appeal.
This story was originally featured on Fortune.com
