Student aid startup founder arrested on fraud charges

Category: Business


Unlocking Word Meanings

Read the following words/expressions found in today’s article.

  1. inflate / ɪnˈfleɪt / (v.) – to make a number higher or greater than it really is

    The organizers were inflating the number of tickets sold as a way to promote their event.

  2. brazen / ˈbreɪ zən / (adj.) – relating to a person’s bad or immoral actions done openly and without shame

    I almost believed that brazen online scam.

  3. fabricate / ˈfæb rɪˌkeɪt / (v.) – to create something false, such as a story or a piece of information, to deceive someone

    The applicant fabricated all her achievements to impress us.

  4. entice / ɛnˈtaɪs / (v.) – to persuade someone to do something in exchange for giving what he/she wants

    Giving freebies is a way to entice people to buy your products.

  5. shuttered / ˈʃʌt ərd / (adj.) – closed for business

    Many shuttered businesses during the pandemic have reopened last year.


Read the text below.

The founder of Frank, a student loan assistance startup company that J.P. Morgan Chase acquired for $175 million two years ago, has been arrested on charges that she duped the financial giant by dramatically inflating the number of customers her company had, authorities said.

Charlie Javice, 31, of Miami Beach, Florida, was arrested in New Jersey on conspiracy, wire and bank fraud charges.

A charging document in Manhattan federal court said she claimed her company had over four million users when it had fewer than 300,000 customers.

Authorities said Javice, who appeared on the Forbes 2019 “30 Under 30” list, would have earned $45 million from the fraud.

In a release, U.S. Attorney Damian Williams said Javice “engaged in a brazen scheme” to defraud the acquiring financial company by fabricating data to support lies she told in a bid to make tens of millions of dollars from the sale of her company.

According to a criminal complaint, Javice in 2017 founded TAPD Inc., which operated under the name Frank, to provide an online platform to simplify the process of filling out the Free Application for Federal Student Aid, a free federal government form used by students to apply for financial aid for college or graduate school.

In 2021, Javice sought to sell her company in her role as its chief executive to a large financial institution, the complaint said.

When JPMC sought to verify that her company had 4.25 million customers, Javice asked her company’s director of engineering to create an artificially generated data set, but the individual declined, it said.

She then hired an outside data scientist to create the synthetic data set as she purchased for $105,000 on the open market real information for over 4.25 million students, the complaint said. But it added that the data she purchased did not contain all of the information she had told JPMC was maintained by Frank.

In a civil complaint filed by the Securities and Exchange Commission, the regulatory agency alleged that Javice made numerous misrepresentations about Frank’s alleged millions of users to entice JPMC to purchase the now-shuttered Frank.

This article was provided by The Associated Press.

Viewpoint Discussion

Enjoy a discussion with your tutor.

Discussion A

  • In your opinion, what made Charlie Javice think that she can get away with defrauding a global financial institution like J.P. Morgan Chase (ex. she has a deep knowledge of the system, she is confident with her methods)? Discuss.
  • In 2019, Javice appeared on the Forbes “30 Under 30” list composed of very successful people under the age of 30. How do you think Forbes will react to this incident? Discuss.

Discussion B

  • In which situations do you think employees can decline the requests of their bosses? Discuss.
  • What do you think employees should do if a boss asks them to do something illegal? Discuss.