Jakarta –
Startup founder Frank, Charlie Javice was arrested on Monday (3/4) night. He was indicted by the United States Securities and Exchange Commission (SEC) for allegedly defrauding JPMorgan Chase in the acquisition of the company worth US$ 175 million or around Rp. 2.6 trillion (exchange rate of Rp. 14,908).
The SEC said Javice led JPMorgan Chase to believe Frank had 4.25 million users. In fact, it only has less than 300,000 users.
The results of the SEC investigation stated that Javice received US$9.7 million directly from the proceeds, as well as millions of dollars indirectly through trusts and contracts entitling him to a US$20 million retention bonus. This was received through the sale of his company in 2021.
“Miss Javice was involved in an ancient scam. She lied about Frank’s success in helping millions of students navigate the college financial aid process, by fabricating data to support her claims, and then using that false information to influence JPMC to make a transaction worth US$175 million,” said SEC Enforcement Division Director, Gurbir S. Grewal, quoted from CNN, Wednesday (5/4/2023).
Javice was arrested Monday (3/4) evening in New Jersey on charges related to the same transaction. He was charged with one count of conspiracy to commit banking and telecommunications fraud (wire fraud), one count of bank fraud, one count of wire fraud, and one count of securities fraud.
If found guilty, he could be jailed for up to decades. Javice was asked to appear in court on Tuesday.
Previously, JPMorgan Chase filed a lawsuit with a Delaware court in December last year. They claimed that Javice had lied about Frank’s success to Frank’s size by falsifying the startup’s student user list.
However, Javice disputed the claims and countersued in February 2023.
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