Frankly Fraud | “The $175 Million Scam”

Summary

---

Campus Files: Frankly Fraud | “The $175 Million Scam” (May 27, 2026)

Episode Overview

This episode of Campus Files takes listeners deep inside the Frank scandal: a high-stakes tale of startup hype, banking due diligence, and billion-dollar deception. Through interviews and narrative, hosts Ian Mont and guest financial reporter Luisa Beltran dissect how Charlie Javice, once the embodiment of elite entrepreneurial promise, orchestrated a multi-million dollar fraud against banking giant JP Morgan, only to be caught in spectacular fashion. The story unpacks how ambition, systemic incentives, and overlooked warning signs collided to create a memorable—and cautionary—moment for higher ed, Silicon Valley, and Wall Street.

---

Key Discussion Points & Insights

1. Who Is Charlie Javice? (02:01–10:11)

• Early Life and Motivations:
  Luisa Beltran shares her reporting on Charlie’s background, pushing past assumptions of privilege to reveal a driven, middle-class upstart given a powerful education and a push for achievement.

  “Initially, when I started reporting on Charlie, I assumed that she was just this rich girl from the suburbs. But… I was really shocked.…You would think that Charlie would be in the rich part, but she wasn’t.”
  —Luisa Beltran (04:17)

• Education & Early Entrepreneurship:
  • Attended the French American School of New York.
  • Founded her first startup, PowerUp, which promoted microfinance for students.

    "PowerUp is a student microfinance and social business action platform for students to really learn, connect and invest in microfinance and social business."
    —Charlie Javice, past interview (05:55)

  • Secured early entrance to Wharton’s Venture Initiation Program.
  • Was a finalist for the Peter Thiel Fellowship; her on-camera behavior foreshadowed disregard for formalities and authority.

    "She'd be like, who needs to play silly games when we can go shopping?"
    —Host/producer, discussing Thiel Fellowship incident (08:19)

2. The Making of Frank (11:46–15:49)

• Frank’s Mission:
  Founded in 2016, Frank aimed to demystify the student financial aid process (FAFSA) and make it easier for students and families to access aid.

  “It’s totally free. …We take a flow that might take hours with the federal government and most students take four minutes with us.”
  —Charlie Javice, TV interview replayed in episode (12:13)

• Hype and Growth:
  • Raised over $20 million in funding.
  • Claimed that each student user saved ~$7,000 on tuition.
  • Marketed as a way to negotiate better aid packages for students.

3. The Acquisition—and the Red Flags (13:14–17:09)

• Context:
  In 2021, the market for fintech acquisitions was hot. Charlie hired LionTree to run a sales process; JP Morgan at first declined, but CEO Jamie Dimon took a personal interest after meeting Charlie.

  “There was a meeting between Jamie Dimon and Charlie Javice. Jamie Dimon was very impressed with Charlie.”
  —Luisa Beltran (14:00)

• Due Diligence:
  Despite extensive diligence with “hundreds of executives,” JP Morgan approved the $175M acquisition in September 2021. Charlie and several employees joined the bank.

4. The Scam Unravels (17:09–19:37)

• The Discovery:
  In 2022, after sending out an email blast to Frank’s supposed 4.25 million customers, JP Morgan realized just 28% of emails were delivered; less than 1.1% were opened.

  “You may be thinking, oh, big whoop—it’s just an email, but this was actually pretty major.”
  —Ian Mont (18:09)

• Synthetic Data:
  Luisa explains Charlie had only ~300,000 actual users, and the rest were “synthetic”—i.e., entirely fake—created by a data scientist to pad numbers.

  “So she claimed she had 4.265 million customers, but really she only had 300,000. And they had used synthetic data to basically make everything else up. And so did she lie? Yeah, absolutely.”
  —Luisa Beltran (18:43)

• Why JP Morgan Missed It:
  Despite rigorous due diligence, JP Morgan failed to spot the discrepancy, raising questions about their internal processes and culture.

  “They couldn’t figure out the fact that she only had 300,000 customers…. When I first saw this, I was like, yeah, JP Morgan must have known.…I just think they didn’t tell Jamie Dimon because he was so infatuated [with Frank].”
  —Luisa Beltran (20:51)

5. The Legal Fallout (19:37–24:08)

• Media Darling to Defendant:
  Charlie had been a Forbes 30 under 30, NYT contributor, CNBC guest—but the story shifted overnight. Initially, some peers stood by her; that changed as evidence mounted.

  “The fraud that Charlie committed was so obvious. …They were just shocked by it.”
  —Luisa Beltran (20:11)

• Defense and Industry Reaction:
  Charlie argued JP Morgan bore responsibility for failing to catch the fraud, a contention that resonated with some experts and backers, including Wall Street titan Mark Rowan, who testified on her behalf.

  “There’s this whole group on Wall Street that are wondering why JP Morgan didn’t look harder. …She’s basically admitting that she committed fraud and that it’s on the duty of the buyer to figure it out, which is not how the law works.”
  —Luisa Beltran (22:31)

6. Consequences and Comparisons (22:56–26:42)

• Sentencing:
  Charlie received a 7-year prison sentence, forfeiture of $22M, and $290M restitution order. Ironically, she won a side legal issue: due to her employment contract, JP Morgan must pay over $100M for her legal fees.
• Not Just Another Elizabeth Holmes:
  The episode distinguishes Charlie from notorious fraudster Elizabeth Holmes, suggesting her crime arose more from the “arrogance of youth” than sociopathy.

  "I do not think she is like Elizabeth Holmes....The arrogance of youth is Charlie Javis’s disease. …She sold her company too soon instead of…making it better."
  —Luisa Beltran (24:24)

• A Broader Industry Problem:
  Luisa reflects that Charlie is emblematic of a generation of privilege and confidence lacking “real human experience,” suggesting the system fosters such outcomes.

  “They don’t really have, like, real human experience.…When they do something shady, …they’re kind of stunned when they get caught.…I don’t think she’s an evil person. I just don’t think she understood that committing fraud would have such a big impact on her life that she would get caught.”
  —Luisa Beltran (25:44)

---

Notable Quotes & Memorable Moments

• On Why JP Morgan Bought In

  “Jamie Dimon was very impressed with Charlie.” (14:00)

• On Fraud Detection Failure

  “They had meetings and they couldn’t figure out the fact that she only had 300,000 customers.” (20:51)

• Charlie’s Defense

  “Her defense was, JP Morgan should have known.” (20:42)

• On Startup Hype and Caution

  “The arrogance of youth is Charlie Javis's disease.” (24:24)

• Industry Reflection

  “You know, Charlie’s just like everybody else on Wall Street, I think, very, very smart. …They’re kind of stunned when they get caught doing something wrong.” (25:44)

---

Timestamps for Important Segments

• Introduction and Context: 02:01–04:10
• Charlie Javice’s Early Life: 04:17–07:33
• Thiel Fellowship Anecdotes: 07:47–09:50
• Creation and Pitch of Frank: 11:46–13:14
• Frank’s Acquisition Process: 13:14–15:33
• Unveiling of the Scam: 17:09–19:37
• Industry & Legal Ramifications: 19:37–24:08
• Comparisons and Analyst Reflections: 24:08–26:42

---

Conclusion

This episode paints a nuanced picture of startup scandal that goes far beyond the headlines. With Charlie Javice’s rise and fall at its heart, listeners get a window into the worlds of elite education, Silicon Valley-style ambition, corporate due diligence, and the costly consequences when institutions ignore red flags. Luisa Beltran’s reporting, combined with the hosts’ insightful narration, shows how easily hype can trump substance—and how both individual choices and structural flaws can crash spectacularly, with real-world costs.

---

For additional stories on American academic scandals:
Check out Gangster Capitalism Seasons 1–3 in this podcast feed.

Transcript

[Quince Brand Representative]

I've been on a mission recently to be more intentional about my closet. Fewer pieces, higher quality. Quint's has become the solution. Everything's versatile, comfortable and genuinely well made. While most stuff at this price point falls apart, Quince is built to last. Their lightweight staples have been on rotation lately. Pieces like the linen blazer and cotton cashmere sweater. The kind of pieces you reach for without thinking. It's rare to find pieces that look this good without the usual markup. Refresh your everyday wardrobe with luxury you'll actually use. Head to quince.com campus for free shipping on your order and 365 day returns. Now available in Canada too. That's Q U I n c e.com campus for free shipping and 365 day returns.

[Podcast Host 1]

Quince.com campus everyone learns a language for different reasons.

[Podcast Host 2]

Maybe you want to watch K dramas without subtitles or talk with family members in their native language. Your life is unique. Your language learning should be too. Rosetta Stone, the trusted leader in language Learning for over 30 years, just launched Rosetta Stone Sapphire, a new app that combines its proven immersion method with the latest innovation in technology to help you learn faster, personalize your lessons and have more fun along the way. Most language apps teach generic topics. Sapphire helps you focus on what you actually want to talk about, whether that's travel, family, work or your favorite hobbies. If you want to take your language skills to the next level, don't wait to try Rosetta Stone Sapphire listeners can get 20% off their Rosetta Stone Sapphire subscription when they sign up.

[Luisa Beltran]

Today.

[Podcast Host 2]

You'll get unlimited access to all 25 Rosetta Stone languages plus all the new Sapphire learning tools. Visit rosettastone.com audio to redeem your 20% off. That's rosettastone.com audio and start learning a language for real.

[Ian Mont]

In 2022, America's largest bank, JP Morgan, took an unusual step by suing their former employee, then 31 year old Charlie Javice. For years, Charlie was seen as a sort of wunderkind, an entrepreneurial genius. She founded multiple companies, raised millions of dollars and even sold her second startup, a college financial aid tool called Frank, to JP Morgan. But less than a year after the sale, she and JP Morgan would face off in court, with Charlie even facing claims of fraud and conspiracy. The story of a young tech entrepreneur facing criminal charges. Now the 31 year old is accused of fraud for allegedly trying to lure JPMorgan Chase so it would acquire her college financial planning startup for $175 million. Many were left stunned and conf. Charlie had been vocal in advocating for students and trying to help make the financial aid process easier, but somehow she ended up facing fraud charges. I'm ian mont. This week on campus files, frankly, fraud, the $175 million sc.

[Luisa Beltran]

I'm Louisa Beltran. I'm a reporter in New York. I've been a financial journalist for over 20 years. Much of my focus has been on private equity, where we get to cover or report on very colorful executives.

[Ian Mont]

In 2022, Luisa was a reporter at Fortune, specifically covering mergers and acquisitions, or M and A for short. While you're a reporter at Fortune, what do you recall as the first time you heard about Charlie Javice?

[Luisa Beltran]

Well, I remember my editor told me to cover the case, and I was like, J.P. morgan is suing this young woman who is head of this company, this startup that they bought. You could tell from the lawsuit that it was just like no holds barred. They were going after her. And it was interesting because JPMorgan typically doesn't do stuff like that, or at least not that I've covered because this

[Ian Mont]

was such an unusual situation. Luisa got straight to work trying to figure out who Charlie Javice is.

[Luisa Beltran]

So initially, when I started reporting on Charlie, I assumed that she was just this rich girl from the suburbs. But then I went to go visit where she actually lived, and I was really shocked. I went out to Mamarnock, which is a beautiful suburbs, but a lot of suburbs. There's the good part, and then the middle class part and then the other parts where the normal people live, like the cops and the people, you know, the secretaries. And you would think that Charlie would be in the rich part, but she wasn't. And I remember standing there looking at the house, and I was like, oh, I probably would have lived in this house if I'd grown up here.

[Ian Mont]

But through the private school she attended, the French American School of New York, or FASNY for short, Charlie did have access to an especially good education.

[Luisa Beltran]

Classes are small. I think Charlie had like 20 or 30 people in her graduating class in high school. Her family was very committed to making sure that Charlie got a good education. And there was a very big push to make sure that she was very strong on extracurriculars for her college application. I think her mother's been quoted that Charlie helped found the soup kitchen when she was 7 or something, which is crazy. She's done a lot of other things. You know, she founded a startup called PowerUp.

[Ian Mont]

It was clear that either by parental guidance or personal motivation or a Bit of both. Charli was drawn to the founder lifestyle. Her FASNY classmates described her as a hard worker and a good talker. Charlie's first startup, pavarup, was an online microfinance platform. Here's Charlie in an old video describing the company.

[Podcast Host 1]

So paverup is a student microfinance and social business action platform for students to really learn, connect and invest in microfinance and social business.

[Ian Mont]

So pretty much it's a little bit hard to explain, but basically it was an online network designed to facilitate small investments in under resourced parts of the world. It's based on the idea that a business person in somewhere like Myanmar would be able to start a business for far less money than in the U.S. charlie described it as a way to promote social entrepreneurship around the world. It was this idea that actually helped Charlie get into the prestigious Wharton School of Business.

[Luisa Beltran]

If you want to go into Wall street, if you want to go into finance, Wharton is the place to go.

[Ian Mont]

Wharton also offered a special entrepreneurial program called the Venture Initiation Program, or VIP for short. It's a startup incubator catering to Wharton's most ambitious entrepreneurs.

[Luisa Beltran]

And you have to be allowed in. And so it was uncommon for a freshman to get in, but Charlie did, based on the strength of Power Up Charlie. If you've ever heard her talk, she's a wonderful speaker.

[Ian Mont]

While a student at Wharton, Charlie got a special opportunity for a Thiel Fellowship.

[Luisa Beltran]

Peter Thiel in venture capital is one of the biggest names. He's one of the founders of PayPal. But one of the things that he did was about 10 years ago, he offered a scholarship to like, rising tech entrepreneurs. Like young tech people, they didn't have to go to college. They could just focus on their startups and he would give you money. And at the time, people were like, oh no, that's horrible. That's horrible. People need to go to school. But he did it.

[Ian Mont]

PowerUp landed Charlie on the list of finalists in 2012. And part of that process was filmed for a CNBC special. We need to foster a new generation of innovators. We want to get more smart people involved in technology. So we created a fellowship.

[Podcast Host 1]

We're looking for people who have really big vision for the future.

[Ian Mont]

Charlie made a name for herself with producers and staff during the taping of this special, but unfortunately not in a good way. According to reporting, one challenge involved a sort of scavenger hunt in teams. Charlie's team opted to split up in order to move faster. But Charlie apparently didn't even attempt any clues. She just went shopping at the mall instead.

[Podcast Host 1]

Does anyone know who went shopping during the scavenger hunt? Well, someone, like, went and, like, got a coffee and something else.

[Ian Mont]

And you think it was Charlie.

[Podcast Host 1]

She'd be like, who needs to play silly games when we can go shopping?

[Ian Mont]

And in the second episode, competitors were presented with a sort of Shark Tank style pitch. They had two minutes to describe their ideas in front of Thiel Fellows, founders and investors. Each competitor was specifically directed to stand at a podium and speak into the microphone. But Charlie ignored these directions and walked straight to the center of the stage. For some time, she spoke to an audience that couldn't hear her.

[Luisa Beltran]

You know, we specifically told everyone, you

[National Debt Relief Advertiser]

have to stand behind the podium to be able to be heard because the

[Luisa Beltran]

mic is not going to pick you up. And yet she still tried to not

[Podcast Host 1]

stand on the podium. And she was like, can everyone hear me? And people are shaking their head like, no, we can't hear you. I thought I had nice shoes.

[Luisa Beltran]

The judges got really mad at her because they gave her some directions. She wouldn't follow it. And then when, you know, they had that one task, she just leaves.

[Ian Mont]

What do you make of that? Because it seems like Charlie would recognize that this is a very important moment. Do you have any sense why she acted that way in that situation?

[Luisa Beltran]

So she's young and she's extremely smart. And so her whole life, you know, people have been telling her how talented she is. I get the sense from Charlie she's essentially a good person, but nobody has ever really told her, maybe you shouldn't do that. And so she's there. She's at this 20 under 20 fellowship contest. She's already done a startup, she's traveled all over the world, she's raised money, she knows what to do. She's probably there sitting. Do I really need this?

[Ian Mont]

Charlie didn't win the fellowship, but that was no problem. She was soon going to dive into her next project, Frank. But what nobody knew at the time was that this project would likely put an end to her career as an entrepreneur and would blow up into a massive scandal.

[Podcast Host 1]

There's never been a better time to

[Luisa Beltran]

get outside and experience the benefits of

[Podcast Host 2]

nature, discover nearby trails and explore the outdoors with alltrails.

[Podcast Host 1]

Download the free app today and find your outside. What if everything you learn in history class was only half the story? I'm Dr. Haruni Bhatt, host of Hidden History. Every Monday I go where history gets mysterious. Vanished civilizations, doomsday prophecies, paranormal phenomena, and events that science still can't fully explain on hidden history. I treat these moments like open case files. Not myths, not superstition, just incomplete explanations waiting for a closer look. Listen to and follow Hidden History available now, wherever you get your podcasts.

[Progressive Insurance Advertiser]

Insurance isn't one size fits all, and shopping for it shouldn't feel like squeezing into something that just doesn't fit. That's why drivers have enjoyed Progressive's Name your price tool for years. With the name your price tool, you tell them what you want to pay and and they show you options that fit your budget enough. Hunting for discounts, trying to calculate rates, and tinkering with coverages. Maybe you're picking out your very first policy. Or maybe you're just looking for something that works better for you and your family. Either way, they make it simple to see your options. No guesswork, no surprises. Ready to see how easy and fun shopping for car insurance can be? Visit progressive.com and give the name your price tool a try. Take the stress out of shopping and find coverage that fits your life on your terms. Progressive Casualty Insurance Company and affiliates Price and Coverage Match limited By state law,

[Ian Mont]

This is an acronym that looms large in the lives of many families. FAFSA F A F S A.

[Podcast Host 1]

But don't worry, we have someone here that can help us with everything that we need to know. Let us introduce you to Charlie Janfies, founder and CEO with Frank.org, a company that helps students with the financial aid process. Thank you. Thank you so much for being here with us.

[Ian Mont]

Charlie Javis founded Frank in 2016 and the goal was simple help make student financial aid easier.

[Podcast Host 1]

It's totally free. That's really important to us for all students to benefit from. So a student takes a picture of their tax returns. Then we do all the tax math for you so no math errors that can put you into very complicated verification, very simple language. We take a flow that might take hours with the federal government and most students take four minutes with us.

[Luisa Beltran]

Now the whole reason for Frank was that Charlie Javis had to get financial aid in college and she said it's wrong that people should not be able to go to college because they can't afford it. So she came out with a company to help people get financial aid.

[Ian Mont]

According to interviews at the time, Frank was really working too. Charlie told the Daily Pennsylvanian that each student who used Frank saved an average of $7,000 in tuition. The idea was that Frank would simply apply for aid and then also negotiate with schools in order to get a better deal. She raised a total of just over $20 million in three rounds of funding by 2021, she and everyone around her saw an opportunity.

[Luisa Beltran]

In 2021, anything having to do with like payments or payment software was really, really hot. And if you were a founder with a startup and you wanted to sell your company, 2021 was the time to do it. So Charlie Javice decided in 2021 that she wanted to sell her company, which was Frank. So she hired a banker, which was Liontree, and she conducted a sales process. And during that sales process, JP Morgan initially looked at Frank and said, no.

[Ian Mont]

A lot of these acquisitions are a bit of a black box. So we don't know exactly what happened. But a couple things lead JP Morgan to re evaluate Frank, one of which was the personal involvement of Jamie Dimon, the chairman and CEO of JP Morgan.

[Luisa Beltran]

Jamie Dimon is one of the most well known and respected executives on Wall Street. His name is probably up there with Warren Buffett. So there was a meeting between Jamie Dimon and Charlie Javice. Jamie Dimon was very impressed with Charlie.

[Ian Mont]

According to Luis's reporting, at this point, Jamie Dimon takes a personal interest in acquiring Frank. So they began a process called due diligence.

[Luisa Beltran]

It's a very standard process in MA for a buyer to conduct due diligence on a target or a company that they're looking to buy. And so what JP Morgan did is that they had all their bankers or whoever does diligence for them. But with hundreds of executives came in and looked at Frank's books, the idea

[Ian Mont]

is that they want to know everything about the business before buying it. It's like getting a home inspection before buying a house to make sure. Is this a sound investment? The process is both crucial and intensive. In many cases, these investigations take months and involve hundreds of people and countless meetings. Frank goes through this process and gets a thumbs up.

[Podcast Host 1]

Jamie Dimon declared last year he planned to get more aggressive in seeking takeovers. And he certainly made good on that promise with JP Morgan buying another financial startup, this time its college financial planning platform, Frank.

[Luisa Beltran]

So JP Morgan buys Frank in September 2021 for 175 million. As part of the deal, the co founder Charlie Javis and some of her employees join JP Morgan.

[Ian Mont]

But only one year later, Charlie would be suspended and eventually fired. And soon after that, she and JP Morgan would be locked in an expensive court battle. That's after the break.

[National Debt Relief Advertiser]

Do you have $10,000 or more in credit card debt? Maybe you're even barely getting by by making minimum payments with credit card debt hitting record highs. National Debt Relief offers real debt relief solutions for people struggling to keep up. These options may reduce a large portion of credit card debt for those who qualify. You don't need to declare bankruptcy and you may be able to pay back less than you owe regardless of your credit. National Debt Relief has already reduced the credit card debt for more than 550,000 consumers. So don't wait. If you owe 10, 20, or even hundreds of thousands of dollars in credit card debt, you can now take advantage of this financial debt relief as the cost of living increases. To find out how much you could save, Visit National Debt Relief.com that's National Debt Relief.com youm're a pro at running

[Bombas Advertiser]

your life, at committing to your workout, at showing up every day. At Bombas, we're pros too. Pros at making socks. Our sport has specialized socks for whatever sport you're committed to. Running, hiking, golf, Pilates, and so much more. Made with sweat, wicking yarns, blister fighting, details and targeted arch support. Bombas sport is pro level socks from the Pros of Socks. For another pro, you go to bombas.com audio and use code audio for 20% off your first purchase. That's bombus.com and use code audio

[Progressive Insurance Advertiser]

this

[Ian Mont]

morning, Charlie Javice, founder of the financial and nonprofit Frank, could be facing up to 100 years in prison. Accused of defrauding JPMorgan Chase out of millions in 2022, Charlie Javice sued the largest bank in the US after her termination and soon after that, Charlie was facing claims of fraud and even criminal charges. It was a dramatic turn of events for a wunderkind like Javice. How did they discover that something was a little bit wrong with the due diligence?

[Luisa Beltran]

Basically, they wanted Frank's customers because they were going to use that to like pitch JP Morgan products to them. Charlie Davis had claimed that Frank had 4.25 million customers. And I think it was January of 2022. They sent an email to those customers. 28% of the emails were delivered and just 1.1% were opened, which is a huge problem for Frank and for Charlie.

[Ian Mont]

You may be thinking, oh, big whoop, it's just an email, but this was actually pretty major. As JP Morgan later argued in court, they purchased Frank in large part because they wanted access to their customers. According to J.P. morgan, all through due diligence, Charlie said Frank had 4.25 million customers. For J.P. morgan, that is a treasure trove. More than 4 million young adults on the way towards a college degree. Four million possible lifelong customers. But when they sent out their first message to these 4 million customers, they found out only 28% were real emails.

[Luisa Beltran]

So she claimed she had 4.265 billion customers, but really she only had 300,000. And they had used synthetic data to basically make everything else up. And so did she lie? Yeah, absolutely.

[Ian Mont]

Okay, Luisa just used the term synthetic data here. That's basically a fancy way of saying completely fake data.

[Luisa Beltran]

During all this, when they were doing diligence, there was actually an executive there who had asked for the customer list. And so Charlie said, no, I cannot give that to you because of privacy issues. Which is true. She can't give over her client list. So what she did is she hired a data scientist to basically fudge the numbers. And so they used synthetic data instead of using the exact names and the information. The people who actually did come to her website, they made it up.

[Ian Mont]

And then the news broke. It was a major shock.

[Luisa Beltran]

Up until this time, Charlie Javice has been in the media a lot. You know, she's been on CNBC multiple times. She's part of Forbes 30 under 30. She wrote a piece for the New York Times talking about financial aid. She is a media celebrity because, you know, she's a 20 something with a startup that's doing well. Everybody loves Charlie Javis. And then JP Morgan sues her and then everything changes.

[Ian Mont]

The story was especially confusing for people who knew Charlie from childhood or college.

[Luisa Beltran]

When the allegations came out from JP Morgan, a lot of her classmates stood by her because they were her friends. They believed her. But then as more the story came out, they changed their minds. The fraud that Charlie committed was so obvious. They were pretty baffled because this is a very smart woman for her to basically lie about the numbers so blatantly. They were just shocked by it.

[Ian Mont]

In court, Charlie would later argue that JPMorgan really should have known that their real customer count was much lower.

[Luisa Beltran]

That was her defense. Her defense was JP Morgan should have known.

[Ian Mont]

Whatever you may think of this as a legal strategy. Louisa says Charlie had a point here.

[Luisa Beltran]

They're a prolific fintech acquirer. It wasn't one or two people that did diligence. They had hundreds of people there looking at Frank's financials, Frank's customers, how much money they had raised, where they were situated. They had meetings and they couldn't figure out the fact that she only had 300,000 customers. So I'm an M and a reporter. I cover deals all the time. When I first saw this, I was like, yeah, JPMorgan must have known. As I was writing all this, I was just like, I think they did know and I think they just didn't tell Jamie Dimon because he was so infatuated with Frank. But I have no way of proving

[Ian Mont]

that Luisa wasn't the only person that felt this way. As puzzling as Charlie's actions are, JP Morgan's are almost more puzzling. While presentations from Frank said they had 4.25 million customers no less than seven separate times, there were a number of other details which should have raised questions about that stat. Details an army of experienced staff and JP Morgan arguably should have spotted Mark Rowan. A giant on Wall street and one of Frank's early investors even went to court to personally testify in support of Charlie.

[Luisa Beltran]

Mark Rowan was one of, you know, he's the co CEO of Apollo. He invested in Frank. So Mark Rowan came to Charlie Javis's defense. He actually went to the courthouse and he, you know, testified on behalf of Charlie Javice.

[Ian Mont]

Charlie's team actually opened their defense with Mark Rowan's testimony. He spoke about his favorable view of Charlie, but stopped short of laying all the blame on JP Morgan. He did not attempt to defend Charlie's purchase of synthetic data.

[Luisa Beltran]

I was like, that's amazing. You know, there's this whole group on Wall street that are wondering why JP Morgan didn't look harder. That's Charlie Davis defense. It's all J.P. morgan's fault. They should have known better. And so is that a defense though? She's basically admitting that she committed fraud and that it's on the duty of the buyer to figure it out, which is not how the law works.

[Ian Mont]

Charlie was ultimately sentenced to seven years in prison and ordered to forfeit more than 22 million. She and her co founder are also ordered to pay nearly $290 million in restitution. It's unclear how much of this money Charlie can actually pay back, though. Most recently she was working as a Pilates instructor in Florida. JP Morgan, for their part, has not come out unscathed. Charlie was able to successfully argue in court that the terms of her employment with JP Morgan meant they should cover her legal fees. The judge agreed and ordered JP Morgan to pay Charlie's legal fees of more than $100 million for their case against her. It's been a mess for everyone involved. A lot has been made of the story of Charlie Javis, another young founder, someone on the Forbes 30 under 30 accused of fraud. This story came shortly after the stories of Elizabeth Holmes, Sam Bankman Fried and Caroline Ellison, all young founders found guilty of fraud. Charlie's story is another example of that, in a way, but Luisa argues it's a bit more complicated than that. Charlie's often compared specifically to Elizabeth Holmes, the founder of Theranos.

[Luisa Beltran]

Elizabeth Holmes, former CEO of Theranos, who

[Podcast Host 1]

has been convicted of fraud, is set to report to prison this week to start serving her 11 year sentence.

[Luisa Beltran]

And then there's a new woman on

[Podcast Host 1]

the scene, Charlie Javis. She was a hotshot in the startup world.

[Luisa Beltran]

Elizabeth Holmes, similar to Charlie Javis. You know, they're both white, they're both upper middle class. So she develops Theranos, which is, you know, supposed to revolutionize blood testing by using the, you know, the finger pricks, which is supposed to provide accurate tests. A lot of people relied on Theranos, and then it came out that Theranos was a fraud. It didn't do anything of what Elizabeth Holmes claimed. There were all these lawsuits. She ends up going to jail. Is this similar to Charlie? Yeah, except personally, I think Elizabeth Holmes, there's something wrong with her. She's crazy in certain respects, but I do not think that Charlie Javis is crazy. Not at all. I just think the arrogance of youth is Charlie Javis's disease. I just think Charlie sold her company too soon instead of selling to JP Morgan. She should have held back and just worked. The company made it better, but again, that takes maturity and foresight. Charlie took the money, and I think she probably thought she could fix it later, but JP Morgan found out and they fired her. And so I do not think she is like Elizabeth Holmes.

[Ian Mont]

In your years covering this space, how does this story sort of fit in your understanding of Wall Street, Fintech? What do you make of this story in the broader context of everything you know about this industry?

[Luisa Beltran]

In my industry, I see a lot of people like Charlie. They come from really nice backgrounds, they go to the best schools, but they don't really have, like, real human experience, like going out and like, you know, having to find your first job, maybe working at a grocery checker or, you know, a secretary or something. They never have that experience of working with regular people. And so when they do something shady, a lot of them, they're kind of stunned when they get caught doing something wrong. And they don't think they should be held to the same laws as everybody else. You know, Charlie's just like everybody else on Wall Street, I think, very, very smart. I don't think she's an evil person. I just don't think she understood that committing fraud would have such a big impact on her life that she would get caught.

[Ian Mont]

If you've got a story idea, we would love to hear about it. Send us an [e-mail] and if you're loving this podcast, be sure to click Follow on your favorite podcast app so you never miss an episode. While you're there, leave us a review and a five star rating. Campus Files is an Odyssey original podcast hosted by Margot Gray and Ian Mont. Our executive producers are Leah Rees Dennis and Lloyd Lockridge. Campus Files is produced by Ian Mont and Margot Gray. Sound design and engineering by Andy Jaskowicz and Zach Clark Legal support by Laura Berman and Melissa Jean Original music by Davey Sumner. Special thanks to Maura Curran, Josephina Francis, Hilary Shuff, Eric Donnelly, Kate Hutchison, Rose, Sean Cherry, Kurt Courtney and Lauren Vieira.

[Shopify Advertiser]

You didn't start a business just to keep the lights on. You're here to sell more today than yesterday. You're here to win. Lucky for you, Shopify built the best converting checkout on the planet. Like the just one tapping ridiculously fast acting sky high sales stacking champion at checkouts. That's the good stuff right there. So if your business is in it to win it, win with Shopify. Start your free trial [e-mail] win from

[Podcast Host 2]

the trusted team behind 48 hours. Welcome to case by Case, your weekly update on the biggest true crime stories unfolding right now.

[Shopify Advertiser]

Nick Reiner remains in custody without bail.

[Ian Mont]

Luigi Mangione accused of stalking and gunning

[Shopify Advertiser]

down United Healthcare CEO Brian Thompson.

[Podcast Host 2]

From high profile trials and stunning evidence to major breaks in cold cases, we'll follow it all case by case. Follow and listen to 48 Hours case by case. Wherever you get your podcasts.