This week's Sunday Long Read comes from the NY Times's Rob Lieber, who brings us yet another colossal Millennial con, the story of how 30-year-old Charlie Javice took the mighty JP Morgan Chase to the cleaners for $175 million dollar investment in her entirely fake college financial planning empire.
When JPMorgan Chase paid $175 million to acquire a college financial planning company called Frank in September 2021, it heralded the “unique opportunity for deeper engagement” with the five million students Frank worked with at more than 6,000 American institutions of higher education.
Then last month, the biggest bank in the country did something extraordinary: It said it had been conned.
In a lawsuit, JPMorgan claimed that Frank’s young founder, Charlie Javice, had engaged in an elaborate scheme to stuff that list of five million customers with fakery.
“To cash in, Javice decided to lie,” the suit said. “Including lying about Frank’s success, Frank’s size and the depth of Frank’s market penetration.” Ms. Javice, through her lawyer, has said the bank’s claims are untrue.
JPMorgan’s legal filing reads like pulp nonfiction, with jaw-dropping accusations. Among them: that Ms. Javice and Olivier Amar, Frank’s chief growth and acquisition officer, faked their customer list and hired a data science professor to help pull the wool over the eyes of the bank’s due-diligence team.
What JPMorgan mostly left out, however, is the story of how Ms. Javice found herself in a nine-figure negotiation with the bank in the first place.
When Frank was born, in 2016, Ms. Javice was 24 years old, displayed great media savvy and claimed to have real-world experience with financial aid and the struggle to pay for college. “It’s grueling, it’s emotional,” she told The Daily Pennsylvanian, a student newspaper at the University of Pennsylvania, adding that her mother would frequently cry while talking to financial aid officers.
Ms. Javice’s personal story — and pledge to cut through the painful thicket of government forms, jargon and regulations surrounding the aid process — must have made compelling reading for angel investors and venture capitalists. Especially those who have little firsthand knowledge of how financial aid actually works.
By promising to help users file financial aid forms more quickly and easily — and deliver billions in savings to teenagers who needed help — her business plan had the halo of doing well while doing good. It eventually added a dot-org web address for good measure.
“I thought it would be an advocacy organization,” said Carly Gillis, who was Frank’s director of content and community for several months in 2018. “A real David and Goliath story.”
At least some of its good deeds, however, may never have been done or were at least highly exaggerated. When many people were still home during the pandemic, Frank started offering “amazing prices” for online classes that earned “real college credits.” This past week, however, schools that appeared on Frank’s website with hundreds of supposedly available courses expressed confusion in interviews about their presence on the site during that period. At one school, nobody had ever even heard of the company.
Ms. Javice’s story is an archetypal tale of late-stage start-up hustle culture — a teenage prodigy turned Ivy League social enterprise maven and shape-shifting savior of higher education.
Or so she would have the world believe.
Now, this is a story of nine-figure fraud and corporate greed on a fantastic level, all made possible by a completely broken higher education system that preys on the least wealthy and most needful of us.
But I can't be completely furious with Javice, as she absolutely fucked JP Morgan Chase over for $175 big ones, and it couldn't have happened to a shittier bank (except maybe Wells Fargo.)
I'm really kind of cool with that.
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