A $581 dinner for two. Nearly $1,000 in laundry fees for one. A Cookie Monster toddler toy. And however many gummy bears $529 gets you.
JPMorgan Chase has made it clear that it is not happy that its former managing director Charlie Javice is asking the bank to pay $73 million in legal costs for her defense. After all, she’s supposed to go to prison for 85 months after her conviction for defrauding the bank.
But when the bank acquired her now-shuttered start-up in 2021, it also agreed to pay her legal fees if trouble emerged. The bank has asked a Delaware judge for permission to stop footing the bill as it continues to get higher. And in newly unredacted sections of its attempt to cut her off, JPMorgan is bringing the receipts.
Incidental expenses aside — and the bank says there are many more, including for nutritional supplements, lamps and 57 hotel room upgrade charges at $300 apiece — the bank’s primary aim is to put the spotlight on the legal fees.
JPMorgan said Ms. Javice had asked the bank to provide advance payments of over $43 million to Quinn Emanuel, one of the firms that represent her. Another $14 million is for Jose Baez, who helped argue her case in federal court, and his firm. Then there’s over $5 million for Ronald Sullivan, who also represented her at the trial, and his team.
At one point during the trial, according to JPMorgan, 29 so-called timekeepers — lawyers and others who might bill by the hour — were in the courtroom.
What were these people doing all day? And can that number — and these dollar figures — possibly be reasonable?
When you’re in this much trouble, it does cost a lot of money to defend yourself. Ms. Javice is appealing her federal case. JPMorgan has sued her separately, and the Securities and Exchange Commission has charged her as well. Now, even more lawyers will presumably fight some more about what the fight should cost.
“Javice’s blatant disdain for JPMC comports with how her army of 147 timekeepers have treated the advancement obligation as a blank check and foreshadows how Javice’s advancement demands will continue to be the product of unchecked billing practices,” the bank said in a filing on Monday, referring to the total number of legal professionals who have so far shown up on bills.
Frank, her start-up, purported to help people fill out financial aid forms more easily. It may have done some of that, for some people, but when Ms. Javice sought to sell the company to JPMorgan, she told the bank that she had millions of customers.
The bank bought her story — and her company for $175 million. It quickly realized that she’d pulled an elaborate ruse and faked a big part of her customer list. So the bank sued, and an army of lawyers started keeping time on both sides. All of them may well bill $175 million for these proceedings before they’re over.
A few itemized expenses came up in a hearing last month, including complaints about a receipt for cellulite butter. Juda Engelmayer, Ms. Javice’s spokesman, said at the time that she had invited people to look at photos of her in her Pilates-wear.
“It’s obvious she never purchased the so-called ‘cellulite cream,’” he said in a statement last month. “The item wasn’t hers, and it wasn’t billed by her.”
A Quinn Emanuel spokesman declined to comment on the butter or its possible buyer, but he did offer a more general statement.
“JPMorgan is trying to walk away from its contractual obligation to pay Ms. Javice’s legal bills,” the spokesman said in an emailed statement. “Now, it is attempting to manufacture distractions by highlighting a handful of attorney expenses (not incurred by Ms. Javice) over two years, the vast majority of which it already reviewed and paid or are not disputed.”
The bank is pressing on, as it faces additional bills from Ms. Javice and her former chief operating officer, Olivier Amar, who also received a prison sentence.
“This is the latest example of how the legal fees sought by Javice and Amar have been beyond patently excessive and egregious,” a JPMorgan spokesman, Pablo Rodriguez, said in an email.
Susan C. Beachy contributed research.
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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