Khaberni - A federal judge in Manhattan has handed down a seven-year prison sentence to young fintech entrepreneur, Charlie Javis, after convicting her of perpetrating a massive financial fraud against J.P. Morgan Chase amounting to $175 million.
Described as “bold and driven by greed”, the bank also faced sharp criticism for not detecting the fraud until a full year after the deal was completed, according to the businessinsider website.
The case dates back to 2021 when J.P. Morgan Chase purchased "Frank," a company founded by Javis, which is a digital platform for processing financial aid requests for students. Javis presented falsified data claiming over 4 million active users, while the actual user base did not exceed 300,000.
According to the prosecutor, Javis forged complete information about users, from phone numbers to social security and income details.
In a decisive ruling, Judge Alvin Hellerstein dismissed the defense team's attempts to downplay Javis's responsibility by pointing out the bank's failure to verify the data before the acquisition process.
During the hearing, the judge said: It is my job to punish her behavior, not the stupidity of the bank. Fraud remains fraud, whether it targets a smart person or a fool.
Although about 300 bankers at J.P. Morgan were involved in evaluating the deal, none of them discovered that the user data was fictitious. It was later revealed that the bank had not actually reviewed the user data charts before the purchase, as Javis evaded delivering them under the pretense of "protecting privacy".
The judge described the bank's performance as "extremely poor due diligence," but confirmed that it was not a justification to reduce the sentence on the accused.
Despite the prison sentence, the judge allowed Javis to remain free during the appeal period, which may take a year or more, considering her plans to start a family and her struggles with infertility, in addition to receiving several letters of support that endorsed her position.
