Key Takeaways
- Charlie Javice convicted of fraud for selling fake startup to JPMorgan for $175M
- Bank still paying $142M+ for her legal bills due to contractual clause
- Expenses include luxury items like cellulite butter and first-class travel
- JPMorgan trapped by indemnification agreement despite conviction
Charlie Javice, the fintech founder who defrauded JPMorgan into buying her startup Frank for $175 million, is now serving a prison sentence. In an extraordinary twist, the very bank she scammed continues paying her massive legal bills—over $142 million and counting—due to a standard acquisition clause.
How the Frank Startup Fraud Unfolded
Javice founded Frank, a platform claiming to help students with financial aid. During JPMorgan’s 2021 acquisition consideration, she presented millions of supposed student user accounts. Prosecutors later revealed these numbers were fabricated, with Javice allegedly hiring a data scientist to generate fake profiles and inflate Frank’s value.
JPMorgan completed the acquisition believing Frank had over four million users, only to discover the platform had a tiny fraction of that number. The bank alerted authorities, leading to Javice’s arrest on federal fraud charges in 2023.
The Legal Bill Dilemma
In March 2025, Javice was convicted on multiple fraud counts and sentenced to more than seven years in prison. However, an indemnification clause in the acquisition agreement requires JPMorgan to cover legal costs for former Frank executives.
This contractual protection, common in startup buyouts, has trapped JPMorgan in funding the defense of the person who defrauded them. The bank has already paid over $142 million in defense expenses for Javice and her former colleague Olivier Amar.
Questionable Expenses
JPMorgan’s frustration mounts as legal bills include personal items like cellulite butter, first-class travel upgrades, and luxury hotel stays. Bank lawyers describe “extreme abuses” in billing records, including physically impossible work hour claims.
Javice’s spokesperson denies she personally submitted these charges, stating her legal team handles all billing decisions.
Why Payments Continue
Despite Javice’s conviction, she is appealing her case, and the indemnification clause forces JPMorgan to keep paying legal fees unless a court orders otherwise. The bank is currently seeking a Delaware judge’s intervention to halt payments, arguing system misuse.
This saga serves as a stark warning about and due diligence failures in corporate acquisitions.
