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"We don't want to end up in orange jumpsuits," is what Charlie Javice apparently said months before her New Jersey arrest Monday, April 3, according to federal prosecutors.
The 31-year-old founder of Frank, a for-profit company that simplified the student loan application process, is facing federal charges for falsifying data sets, ultimately scamming J.P Morgan Chase out of $175 million officials said.
It wasn't immediately clear where in New Jersey the Miami Beach entrepreneur was captured.
Four years after founding her company, Javice told J.P. Morgan Chase during the start of a potential business transaction that her company had 4.25 million customers, when in fact, it only had 300,000, prosecutors allege.
When the bank tried to verify Frank's number of users and amount of data collected about them, Javice attempted to come up with a fake set of data to prove her bogus 4.25 million users — despite protest from engineering directors, officials said.
When Frank's engineering director raised concerns about Javice's inquiry into the falsification of data, she made the orange jumpsuit quip, according to federal officials. The employee declined Javice's demand.
Having been shot down, Javice went outside the company to a different data scientist, who she hired to create the phony data set, according to prosecutors. The bogus numbers were given to J.P. Morgan Chase, officials said.
Guided by that data, the bank agreed to purchase Frank for $175 million, while also bringing Javice and other Frank employees on board with new jobs. The former CEO received more than $21 million for selling her stake in Frank, and was to be paid an additional $20 million on a signing bonus.
Javice was arrested in New Jersey on charges of:
- Conspiracy to commit bank and wire fraud;
- Wire fraud affecting a financial institution;
- Bank fraud;
- Securities fraud.
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