Javice Sentenced to 85 Months for Frank Fraud in JPMorgan Chase Deal

Charlie Javice, the founder of the college-finance startup Frank, was sentenced on Monday to 85 months in federal prison after a jury convicted her in March of inflating Frank’s user base to induce JPMorgan Chase to buy the company for $175 million. U.S. District Judge Alvin K. Hellerstein imposed the sentence in Manhattan federal court, saying Javice was a person of good character who had nevertheless done “bad things” that required punishment to preserve market honesty.

Prosecutors said Javice and colleagues presented JPMorgan with fabricated customer lists showing more than four million users when the platform in fact had fewer than 300,000. The government’s case detailed efforts to create synthetic data and to supplement lists with names bought from commercial data brokers. Prosecutors also said the deception included paying a data scientist to generate fake accounts. JPMorgan’s testing of the purported customer list produced irregular results and flagged undeliverable addresses, prompting an investigation that ultimately uncovered the scheme, prosecutors said.

The court found Javice guilty on multiple counts, including bank fraud, securities fraud, wire fraud and...