The American financial giant JP Morgan Chase can be said to be a leader on Wall Street, but it was easily defrauded of nearly 200 million US dollars by Charlie Javice, who was only 31 years old. With a history of more than 220 years, JPMorgan Chase is the largest banking giant in the United States and the bank with the highest market capitalization in the world, with assets exceeding US$3.6 trillion and a total of more than 240,000 employees. Many people were shocked that such a well-established financial investment institution was deceived by such crude fraudulent means.
Century-old bank JPMorgan Chase was defrauded of 200 million U.S. dollars, and this time it was a golden girl certified by Forbes
The whole story started with Jarvis fraudulently misreporting the number of users (i.e., a large number of people and fake accounts) to trick JPMorgan into buying Frank, the student loan application site she founded (now defunct). During the JPMorgan acquisition, Jarvis claimed his Frank platform had 4.3 million users. However, the JPMorgan Chase management team found that when sending marketing emails to users, most of them were bounced by the system, and only 1% of the successfully sent emails were displayed as read. The final results show that Frank’s real users are only over 200,000, while Jarvis’s fabricated user data is as high as 4 million.
JPMorgan’s management team checked with Jarvis and Frank’s other top executives as soon as they noticed something was wrong. Jarvis has repeatedly emphasized the authenticity of the data, but JP Morgan Chase decided to cancel the acquisition after learning the real situation, and filed a claim against Jarvis and Frank at the same time. Jarvis faces several federal charges including wire fraud, financial fraud, conspiracy to commit fraud and securities fraud, each of which carries a maximum sentence of 30 years in prison if convicted. She used her Miami property as collateral to post a $2 million bond and is temporarily back in Florida awaiting a court appearance.
Born in New York, Jarvis is a rich second generation on Wall Street. He studied in elite private schools in New York from kindergarten to high school, and then successfully graduated from the Wharton School of Business at the University of Pennsylvania. In 2016, Jarvis, who was only 24 years old, founded the student loan application tool website “Frank” and served as the CEO himself. It was officially launched in 2017 to help students and parents select and apply for college grants and student loans.
In 2019, the 27-year-old Jarvis appeared on the “Forbes” magazine and was included in the “30 Under 30” list. He is considered to be the most anticipated young entrepreneur and future business leader in the United States. Now it seems quite ironic (It’s even more ironic that “Frank” is “honest” in English).
The Forbes 30 Under 30 have collectively raised $5.3B in funding.
The Forbes 30 Under 30 have also been arrested for frauds and scams worth over $18.5B.
Incredible track record. pic.twitter.com/aJjCGbkstc
— Chris Bakke (@ChrisJBakke) April 4, 2023
However, the fraud Jarvis used was actually not very clever. She spent $18,000 to find an external data expert to forge a fake user list, and spent another $105,000 to buy one from a consulting firm that included 450. Tens of thousands of students’ real data packages were combined to create a fake user list including real identity information, which eventually fooled JPMorgan’s M&A review team. The cost of Jarvis’ fraud was only $120,000, but he successfully defrauded JPMorgan Chase’s purchase price of $175 million, plus more than $20 million in bonuses. After Jarvis was arrested, the list of young entrepreneurs and future business leaders launched by Forbes magazine also became the target of ridicule on social networking sites, because they selected several well-known future business leaders. Fraudsters, including Sam Bankman-Fried, founder of FTX, a cryptocurrency trading platform suspected of embezzling tens of billions of dollars in customer funds, Trevor Milton, founder of Nikola, a hydrogen energy truck brand with false advertising and no technology but listed financing, and the so-called female version of Jaber Forbes has almost become an anti-indicator.
This incident also reminds the public that whether you are an entrepreneur or a financial giant, you must maintain integrity and conduct detailed investigations and judgments on various market information, otherwise you may bear serious losses, even if you have hundreds of thousands of employees and auditors The same goes for financial giants.
