JPMorgan Chase acquired Charlie Javice’s startup Frank—which claimed a user base of around 4 million—for $175 million in 2021 only to find out a few months later that almost 90% of the platform’s users were fake|Ben Sutherland|CC BY 2.0

Federal prosecutors and Securities and Exchange Commission (SEC) arrested and charged Charlie Javice, the founder of Frank, with a total of four counts of criminal and civil fraud Tuesday.

Three of the charges against Javice—who was on the Forbes 30 Under 30 list in 2019—carry a prison sentence of 30 years each.

🏦 Backstory
JPMorgan Chase acquired Javice’s startup Frank—which claimed a user base of around 4 million—for $175 million in 2021, only to find out a few months later that almost 90% of the platform’s users were fake.

Javice allegedly inflated the platform’s user base to convince the banking giant into buying it.

The Wall Street bigwig claims that more than 70% of emails sent to Frank’s users bounced back and only 103 out of the 400,000 emails sent, were opened.

Javice denies all allegations. She filed a countersuit in February where her attorney accused JPMorgan of shifting “blame for a failed and now-regretted acquisition to someone they view as an easy target: its young female founder."