Charlie Javice wanted a mistrial.John Minchillo/Associated Press
Federal prosecutors say Charlie Javice tricked JPMorgan into paying $175M for her startup, Frank.
At her New York fraud trial on Wednesday, her lawyers asked, without success, for a mistrial.
They said prosecutors are hiding a key “witness” from jurors: the Frank website itself.
Federal prosecutors are hiding an important “witness” from the jury at Frank founder Charlie Javice’s New York fraud trial, her lawyers said Wednesday — the Frank website itself.
The website, which helped students apply for college financial aid, was shut down in November 2022, a year after JPMorgan Chase purchased it for $175 million.
Javice is on trial for allegedly clinching the deal by fraudulently exaggerating Frank’s value, claiming the website had 4.25 million users when it only had 300,000.
On Wednesday morning, lawyers for Javice filed a motion demanding a mistrial, saying prosecutors failed to show jurors key content from the website that could help clear their client.
The motion cites undated pages from the defunct site in which Javice, the lawyers say, was frank about Frank.
“Frank has helped over 250,000 families,” one page cited in the motion reads. “Frank is an online tool that has helped 300,000 students maximize their financial aid for college,” another page said.
“This case is about whether Ms. Javice misrepresented metrics related to the Frank website,” defense lawyers from the Miami-based firm of Quinn Emanuel Urquhart & Sullivan wrote the judge.
“Yet, the website has been the equivalent of the missing key witness,” they wrote. “An exculpatory one, at that.”
The motion didn’t address why the defense couldn’t simply show any useful web pages to jurors themselves. Nor did it succeed in stopping the trial — testimony continued without it being discussed in court.
Prosecutors did not file a response. During a month of testimony, they have shown jurors thousands of pages of emails and spreadsheet evidence in which JPMorgan Chase executives were assured that Frank’s users numbered in the millions.
Though it apparently fell flat, the mistrial motion provided the best glimpse yet into the defense strategy.
“The Frank website is directly relevant to two of Ms. Javice’s legal defenses: lack of intent and materiality,” the motion says.
The fintech entrepreneur had no intention of hiding Frank’s true user base from the bank — instead, “she was proud of it,” the motion says. “Ms. Javice displayed it multiple places on the Frank website.”
As for materiality — meaning whether the alleged exaggeration of user numbers was a material, or meaningful, reason JPMorgan purchased Frank — here, too, the website clears her, the lawyers argue.
The bank would have been “on notice” that Frank had 300,000 user accounts just from looking at the website, the motion said.
Last week, in another defense filing, Javice’s lawyers said they’ll argue that the 4.25 million figure referenced website traffic, not user accounts.
And in defense opening statements, jurors were told that the bank was really looking to acquire Javice, not her data.
The young entrepreneur is an “incredible young woman” who’d made the Forbes “30 Under 30” list and who, at age 28, secured a one-on-one meeting with Jamie Dimon, JPMorgan’s CEO, lawyer Jose Baez said in openings.
Charlie Javice sold Frank to JPMorgan Chase for $175 million.Charlie Javice
For the jury, Wednesday was another day of looking at document evidence.
Rachel Danko, an investigative analyst for the US attorney’s office, spent all day on the witness stand, showing jurors months of texts, emails, and spreadsheets that prosecutors say prove the conspiracy.
Jurors were not shown the trial’s most controversial texts, which have been barred as evidence.
They include one in which Javice complains about the sentence of Theranos fraudster Elizabeth Holmes, calling the defrauded investors in that case, “sophisticated assholes.” In another text kept from jurors, Javice calls her second-in-command at Frank, Olivier Amar, “the best partner in crime.”
The two are now co-defendants facing up to 30 years prison on charges of conspiracy and bank fraud
The evidence jurors did see on Wednesday revealed more of the close working relationship between Javice and Amar as they rushed to send JPMorgan the data the bank demanded.
The two also used WhatsApp to celebrate their $175 million windfall.
Jurors saw text exchanges between Javice and Amar in which they commiserate about their days of anxiety and nights of sleeplessness.
In the texts, they share jokes and the occasional smiley and winky emojis.
Javice kidded Amar about a new Land Rover he planned to buy if the deal went through, and joked about a new shipment of company “swag” — sweatshirts made by Lululemon and bearing the “Frank” logo.
“Better pick up the Land Rover in a Frank Lulu sweatsuit :p ” Javice texted Amar on August 3, 2021, after he texted that payment had just gone through on what prosecutors say was a fake database of 4.25 million students.
“Score. Call me,” she texted Amar after the payment cleared. Days later, JPMorgan finalized its acquisition offer.
Federal prosecutors said they expect to finish presenting their direct case on Thursday. Neither defense team has said on the record whether defense witnesses would be called.
US District Judge Alvin Hellerstein said earlier this week that he expects trial testimony to conclude by the end of the week.
