Former CEO of Frank Charged with Fraud and Submitting False Data to J.P. Morgan Chase in $175 Million Deal

Another fraud case has gone wild. A fake "30 under 30" expert and so-called commentator. Truly trashing what these "30 under 30" and "40 under 40" lists mean — it is all marketing and fake signaling not at all merit-based. The same weak value and pay-to-play exists with the Forbes contributor lists, generally speaking. 

I am certainly a supporter of entrepreneurs and fighting big corporate bureaucracies. Small businesses are the lifeblood of the global economy and they generally do so much good. Yet Javice was not even experienced or mature enough to understand the depths of most of that.

The evidence supports that she was a know-nothing, greedy, charismatic, egotistical liar! Her public resume/LinkedIn profile is at the jr analyst level and that is being kind. There is nothing wrong with that as we all start somewhere, but why not just do the work and learn along the way like the rest of us. There is no shortcut to success and wealth. If its too much success too fast fraud is more likely.

Moreover, why would JPMorgan give such a person a leadership role so fast and with so little evidence? Merely because she was "cool" and trending like a celebrity hired to host an album release party. Likely because she fit the marketing voice of the student loan product market, which they were going after. Nonetheless, they should have done better due diligence. Ironically, that is likely a part of Javice's legal coming defense to the civil lawsuit and fraud charges. 

The DOJ's press release described it this way: 

"In or about 2017, JAVICE founded TAPD, Inc., d/b/a Frank (“Frank”), a for-profit company that offered an online platform designed to simplify the process of filling out the Free Application for Federal Student Aid (“FAFSA”). FAFSA is a federal government form, available free of charge, that students use to apply for financial aid for college or graduate school. JAVICE was Frank’s CEO.

In or about 2021, JAVICE began to pursue the sale of Frank to a larger financial institution. Two major banks, one of which was JPMC, expressed interest and began acquisition processes with Frank. JAVICE represented repeatedly to those banks that Frank had 4.25 million customers or “users.” JAVICE explicitly defined “users” — to both banks — as individuals who had signed up for an account with Frank and for whom Frank therefore had at least four identified categories of data (i.e., first name, last name, email address, and phone number). In fact, Frank had less than 300,000 users."

More specifically, Javice initially approached Frank’s director of engineering to create the fabricated data set. When the engineer rejected the request, Javice tried to reassure the employee that it was fully legal — yet it was not. “We don’t want to end up in orange jumpsuits,” Javice said, as described by the complaint. Javice later paid a handsome sum of $18,000 to a professor, and then about $105,000 to a data analytics firm or two to in a attempt to build or more realistic data set to cover her tracks, but many fields were missing.

JPMorgan later realized the scam when it launched an email marketing campaign for individuals included on Frank’s purported list of customers that generated very few responses. Imagine getting that fake e-mail when you had nothing to do with Frank, the FASFA, and imagine how many of them bounced.

In the end only 200k to 250k of the 4.25 million user records turned out to be real, though the quality of the those remaining is skeptical. The functionality of the the Frank web interface also seemed overblown and elementary. Thus, JPMorgan decided to shut down the domain and disband Frank entirely.

Even if Javice had 200k real customers, that is still solid. A smaller but still valuable business opportunity could have been manifested from that. Yet all that was tarnished with the fraud.

Morever, it's not at all surprising that reports are coming out indicating she was affiliated with one of the more shady banks that recently failed and had deep ties to crypto money laundering, Signature Bank of NY. 

Lastly, you do not need to make tens of millions of dollars to be a successful entrepreneur. Be yourself, be honest, be ethical, and do what is right. We all pay higher prices for these types of fraud, and we should not be afraid to talk about it for the betterment of our communities. Stay vigilant with suspected fraud and scams and speak up to shut down people like this! 

#fraudsters #scammers #greed #ego #millennial #frank #fabrication