In April, millennial CEO Charlie Javice was charged with duping JPMorgan into acquiring her startup, Frank Financial Aid, for a whopping $175 million.
Now Manhattan federal prosecutors are charging another executive in the alleged fraud case: Frank’s chief growth officer, Olivier Amar.
A superseding indictment filed on Wednesday charges Amar with wire fraud, bank fraud, securities fraud, and conspiracy to commit wire fraud and bank fraud. A grand jury indicted Javice, 31, on the same charges in May. She has pleaded not guilty.
Amar, 49, also became a defendant in a separate case against Javice filed by the Securities and Exchange Commission, which in an amended complaint filed Wednesday charged Amar with aiding and abetting Javice’s violations of the Securities Act and violating antifraud provisions himself.
The Daily Beast left messages for Amar and one of his attorneys but did not receive an immediate response. A spokesperson for the U.S. Attorney’s Office in the Southern District of New York did not respond to requests for comment. JPMorgan Chase declined to comment.
In a criminal complaint, the Manhattan U.S. Attorney’s Office stated that Javice “engaged in a calculated scheme” in 2021 “to falsely and dramatically inflate the number of customers at her company” in order to persuade JPMorgan to buy her company. Once pitched as “an Amazon for higher education,” Frank’s investors included Apollo Global Management CEO Marc Rowan.
Prosecutors say that Javice falsely told two major banks that Frank had 4.25 million users when the startup really only had 300,000 customers. To cover her tracks, the complaint alleges, Javice hired a data scientist to artificially generate user data.
According to the SEC’s amended complaint, Amar “arranged for Frank to pay $105,000 to a third party data compiler for a one-time use of its college student data,” in case the data scientist, who is a university professor, couldn’t deliver on the list of allegedly fabricated users.
Amar received $5 million in the JPMorgan merger, the complaint says, and was entitled to a $3 million retention bonus.
Javice received more than $21 million for selling her stake in Frank and under the terms of the deal was supposed to also be paid a $20 million retention bonus. The accusations in the criminal filings mirror those in a civil suit JPMorgan filed against Javice and Amar in December 2022.
As The Daily Beast reported, Javice and Amar’s startup began to get some press attention—and scrutiny from the Federal Trade Commission for allegedly misleading consumers—in the years before the JPMorgan deal.
Amar and Javice are also facing a lawsuit filed by JPMorgan Chase in connection with the Frank merger. The suit—and subsequent criminal charges—sent shock waves throughout the financial technology community, still reeling from the epic falls of wunderkinds Elizabeth Holmes and Sam Bankman-Fried.
Javice had countersued JPMorgan, arguing that the financial giant neglected to take advantage of her and Frank’s “acumen for attracting a young, diverse new audience to Chase’s services.” Instead, she argued, JPMorgan “grossly mismanaged its investment from the start” by trying to monetize data from her users—an alleged plan she claims she pushed back on.
Javice, a Wharton grad once featured in a Forbes 30 Under 30 list, opened Frank’s offices in New York and Tel Aviv in 2017.
Earlier this year, former employees told The Daily Beast that Amar was Javice’s right hand at Frank. One staffer said Javice was “the cookie cutter version of a cool millennial CEO” and “maybe too chill,” while Amar was a “cheerleader for her.”
Another worker said that from their perspective, “a lot of people around Charlie were afraid to tell her she’s wrong, and those that disagreed with her would eventually be fired or quit over not being able to change things.”
