© Reuters. FILE PHOTO: A woman walks past JPMorgan Chase & Co’s international headquarters on Park Avenue in New York July 13, 2012. REUTERS/Andrew Burton
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By Luc Cohen
NEW YORK (Reuters) -The young entrepreneur Charlie Javice pleaded not guilty on Monday to charges of defrauding JPMorgan Chase & Co (NYSE:JPM) into buying her now-shuttered college financial aid startup Frank for $175 million in 2021.
Federal prosecutors in Manhattan said Javice, 31, repeatedly lied about her company to JPMorgan, including by claiming that Frank – marketed as a tool to help simplify college financial aid applications for students and parents – had lined up 4.25 million student customers when the number was closer to 300,000.
She entered her not guilty plea to securities fraud, wire fraud, bank fraud and conspiracy charges during a video appearance before U.S. Magistrate Judge Gabriel Gorenstein in Manhattan, court records showed.
Javice has been free on $2 million bail since her first court appearance on April 4, a day after she was arrested.
A grand jury indicted her on May 18, after prosecutors indicated they were in talks with her defense lawyers “regarding a possible disposition of this case,” language that sometimes foreshadows a guilty plea.
JPMorgan has said it learned of Javice’s alleged fraud after receiving few responses when it sent marketing materials to people whom she claimed were real.
The bank closed Frank in January, and Chief Executive Jamie Dimon has called the acquisition a “huge mistake.”
A JPMorgan spokesman declined to comment on Javice’s plea.
Javice had studied at the University of Pennsylvania’s Wharton School.
Before selling Frank, she had received much media praise for her work, showing up in 2019 in Forbes magazine’s “30 Under 30” finance list and Crain’s New York Business’ “40 Under 40” list.
Source: Investing.com
