Charlie Javice, founder of the student financial aid startup Frank, is set to be sentenced in Manhattan on Monday following her fraud conviction for misleading JPMorgan Chase into paying $175 million for the company. Central to the sentencing is a fierce legal dispute over how to calculate the bank’s “loss.”
Prosecutors argue Javice should serve 12 years in prison and pay $300 million in restitution, claiming the bank suffered enormous financial harm due to her repeated lies about Frank’s user base. While Javice claimed access to 4 million Gen-Z users, Frank only had data for 300,000, meaning JPMorgan’s projected revenue and strategic gains were massively inflated.
The defense counters that the bank did receive value from Frank, including its technology, internal team, and potential future growth. They argue that subtracting this “legitimate value” from the calculation could significantly reduce Javice’s restitution and sentence.
Javice’s lawyers also highlight her background as a fintech prodigy recognized on Forbes’ “30 Under 30,” emphasizing the company’s real-world impact on college-bound students and the broader education technology sector.
Judge Alvin K. Hellerstein has already denied a postponement due to Javice’s health issues and has yet to decide on her request to remain free pending appeal. The coming sentencing will hinge on whether the court sides with the prosecution’s gross-loss approach or the defense’s net-value argument, determining both her prison term and the restitution amount.
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