Charlie Javice, who was convicted of fraud for providing fake customer lists to JPMorgan Chase while selling her start-up to the bank, was sentenced to 85 months in federal prison on Monday.
Federal prosecutors had requested 144 months after a jury found Ms. Javice guilty in March of three counts of fraud and one count of conspiracy to commit fraud.
The case drew international attention partly for the brazenness of the crime. Ms. Javice’s company, Frank, was meant to help students fill out their financial aid forms. Investors saw something else in it: the possibility of building a list of millions of upwardly mobile customers that an acquirer would covet.
When JPMorgan came calling and eventually paid $175 million for Frank, the customer list wasn’t as big as Ms. Javice had told the bank it was. So she set about creating “synthetic data” to add millions of customers with the help of Adam Kapelner, an associate professor of mathematics at Queens College in New York.
He asked her why she needed it, but she wouldn’t tell him the reason, according to his testimony at trial.
Prosecutors also noted that Ms. Javice and Olivier Amar, Frank’s chief growth and acquisition officer, bought real names and emails from commercial data brokers because they knew that the bank would conduct tests of Frank’s customer list.
“I accept the jury’s verdict and take full responsibility for my actions,” Ms. Javice said in a letter this month to the presiding judge, Alvin K. Hellerstein.
“I have remorse deeper than I knew possible,” Ms. Javice said during the hearing on Monday. She tearfully apologized to JPMorgan shareholders, its in-house team, her parents, her boyfriend and Frank’s employees who she said were “in some way stained by their proximity to me.”
Though the bank eventually pieced together the scheme after conducting its tests, its due diligence team failed to sniff out the fraud during the acquisition. The bank still chose to go public and has an ongoing civil suit against Ms. Javice.
“They acquired a crime scene,” Micah F. Fergenson, an assistant U.S. attorney, said in court Monday.
JPMorgan declined to comment.
Ms. Javice’s legal team, which recently added Alexandra Shapiro, one of Sean Combs’s lawyers, presented 114 letters of support from people hoping to persuade the judge to be lenient in his sentencing. Among them were four rabbis, one cantor, a formerly incarcerated judge, two doormen and a person who works at the marina near Ms. Javice’s Miami Beach residence.
One letter writer noted that Judge Hellerstein had spoken at his great-uncle’s funeral. And many people mentioned Ms. Javice’s ongoing fertility treatments and how several years in prison could affect her ability to have children.
Ron Lieber has been the Your Money columnist since 2008 and has written five books, most recently “The Price You Pay for College.”
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