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NEW YORK (Reuters) -The young entrepreneur Charlie Javice has been indicted on charges of defrauding JPMorgan Chase & Co (NYSE:JPM), the largest U.S. bank, into buying her now-shuttered college financial aid startup Frank.
A four-count grand jury indictment made public on Thursday in Manhattan federal court charges Javice with securities fraud, wire fraud, bank fraud and conspiracy. It also seeks the forfeiture of millions of dollars from her accounts.
Neither the U.S. Attorney’s office in Manhattan nor Javice’s lawyers immediately responded to requests for comment.
Javice, 31, who made Forbes magazine’s “30 Under 30” finance list in 2019, was arrested on April 3 and charged with duping JPMorgan into buying Frank for $175 million in 2021.
Prosecutors said Javice repeatedly lied about her company to JPMorgan, including by claiming Frank had lined up 4.25 million student customers though the number was closer to 300,000.
The indictment was filed 15 days after prosecutors said they and defense lawyers were in talks “regarding a possible disposition of this case,” language that sometimes foreshadows a guilty plea.
In connection with that, prosecutors were granted more time to have Javice indicted by a grand jury.
Javice has denied prosecutors’ accusations. She has yet to enter a plea.
Founded in 2017, Frank was marketed as a tool to help simplify college financial aid for students and parents.
JPMorgan has said it learned of Javice’s fraud after receiving few responses when it sent marketing materials to people who she claimed were real.
The bank closed Frank in January, and Chief Executive Jamie Dimon has called the acquisition a “huge mistake.”
JPMorgan separately sued Javice and former Frank chief growth officer Olivier Amar in December in Delaware federal court for fraud, saying they inflated Frank’s customer base to induce the bank’s purchase.
Javice countersued JPMorgan, saying it owes millions of dollars after firing her “without valid cause” in November.
She and Amar are suing JPMorgan in Delaware Chancery Court to recoup legal fees.
The criminal case is U.S. v. Javice, U.S. District Court, Southern District of New York, No. 23-cr-00251.
