Jakarta –
JP Morgan Chase (JPMC) is suing fintech startup founders Frank, Charlie Javice and also Oliver Amar, on charges of falsifying user data. He did this not long after acquiring the startup.
Frank is a startup that provides services in the form of educational loans to students in the United States. JPMC acquired Frank for US$ 175 million or around IDR 2.6 trillion (in an exchange rate of IDR 15,250) in 2021.
Reporting from CNBC, Monday (16/01/2023), Frank was caught falsifying data on the number of users. Of the total 4.25 million users that were claimed, it turned out that there were only 300,000 users.
The lie was detected after it sent marketing emails to 400,000 subscribers Frank. But apparently, 70% of the emails were returned. This information was conveyed by JPMC in a lawsuit it filed with the US District Court in Delaware late last year.
Meanwhile, as reported by Forbes, it is suspected that this step was triggered because JPMC had asked for details regarding the number of users as part of the takeover discussions. Until finally, Javice and Amar intended to fake millions of these accounts.
“Javice first rejected JPMC’s request, arguing that he was unable to share his subscriber list due to privacy concerns,” JPMC wrote in its lawsuit explaining the chronology of the case that occurred with Javice.
They are said to have asked Frank’s technical director to produce fake customer details. After his technical director refused, Javice is then alleged to have paid $18,000 to a data science professor to create millions of fake accounts using synthetic data.
Javice’s own lawyers have denied the allegations. In fact, Javice instead filed a counterclaim stating that JP Morgan was trying to undermine the acquisition agreement that had been agreed upon.
JP Morgan closed Frank’s operations on Thursday after the lawsuit went public. Javice himself continued to work as managing director overseeing Frank’s products after the acquisition was made. However, JPMC suspended its work in November.
This fraud case surprised the public, because Javice himself was included in the Forbes 30 under 30 list in the Finance category in 2019. The list contains 30 young figures under 30 years of age who have flashy achievements and major contributions to society.
Javice is included in the list because it cleans up startup Frank which can speed up and simplify the process of applying for student loans in the United States.
Forbes says Javice founded Frank from just 15 members in 2016. Since then, he has raised US$16 million in funding for Frank. The startup he has created is also claimed to have helped 300,000 users apply for financial assistance.
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