Two years after selling her company for $175 million, a young startup founder is detained for fabricating user growth and active users. Frank's inventor, Charlie Javice, was sued by JPMorgan Bank & Co. for misleading them and selling her firm for US$175 million. Since his arrest, Charlie has been charged with three counts of fraud and one of conspiracy.

 Two years after selling her company for $175 million, a young startup founder is detained for fabricating user growth and active users.

Frank's inventor, Charlie Javice, was sued by JPMorgan Bank & Co. for misleading them and selling her firm for US$175 million. Since his arrest, Charlie has been charged with three counts of fraud and one of conspiracy.

After being accused of conspiracy and fraud, Charlie Javice, the founder of the firm Frank, was detained in the US on Monday. The woman, who is in her early 30s, was accused of faking the number of users on her website and creating a false data list by US bank JP Morgan Chase. The young creator was recognised as a "rising star" and included in Forbes' 2019 30 under 30 issue.

Three counts of fraud and one count of conspiracy are levelled against Charlie Javice. According to a Reuters article, each of these carries a 20–30 year prison sentence. Her arrest was reported on Tuesday by the US Department of Justice.
Tuesday in Manhattan, Javice had a brief appearance before US Magistrate Judge Barbara Moses, who set bail at USD 2 million. Thus, the Securities and Exchange Commission brought civil lawsuits.

In a statement, US Attorney Damian Williams went into greater detail about the nature of the arrest. Williams stated, "As alleged, Javice engaged in a blatant plan to deceive JPMC during an acquisition deal worth USD 175 million. She faked statistics to back her claims and lied directly to JPMC in order to profit more than USD 45 million from the sale of her business. This arrest serves as a warning to business owners who lie to promote their enterprises that their deceit will come back to haunt them and that this Office will hold them accountable for transgressing the law out of their own self-interest.

In 2021, JP Morgan Chase purchased Charlie's startup, Frank, for USD 175 Million (about Rs. 1,450 crore). Frank promoted itself as a resource for assisting students applying for school loans. It was introduced in 2017 with the promise of making the application process simpler for its users. Javice previously referred to the company as the "Amazon of higher education." The bank not only paid the $175 million but also employed Javice and other Frank staff.

In addition, Javice received almost USD 21 million for selling her stock investment in Frank and was due an additional USD 20 million as a retention incentive under the terms of the agreement.

In addition, the lawsuit claimed that Javice created a phoney data list with users' names, addresses, dates of birth, and other personal information while lying about the platform's popularity. Javice had initially cited "privacy issues" in their refusal to divulge information about their clients, it was further said. Yet, when it was insisted that she share the data, she made up "customer accounts from scratch."

The bogus user accounts list was allegedly generated with the aid of a data science professor from a college in New York City who utilised "synthetic data" techniques for the purpose and was paid USD 18,000 for his services, according to JP Morgan's lawsuit. These accounts were subsequently given to a different vendor for "validation."

Olivier Amar, the startup's chief growth officer, is also named in the case, which claims that a senior engineer at the business was requested to build the bogus list before Javice and Amar approached the data science professor. The case also included ASL Marketing as a defendant.

Javice allegedly attempted to conceal the entire situation by telling the vendor to "remove the phoney list," according to JP Morgan's lawsuit.

Javice filed a lawsuit in February of this year, accusing JP Morgan of "compromising her reputation" and keeping back USD 28 million in retention payments and stock.