💫 Summary
Charlie Javis, a 31-year-old woman, scammed JP Morgan by falsifying customer numbers and selling her company for $175 million. Her history of lies and deception eventually caught up with her, resulting in criminal charges and a possible prison sentence of up to 100 years.
✨ Highlights📊 Transcript
Charlie Javis scammed JP Morgan by defrauding them out of millions, and now she is facing up to 100 years in prison.
Charlie Javis grew up in an affluent New York family and attended a well-known French-American private school.
Her first venture, a non-profit called PoverUp, aimed to provide small, low-interest loans to underprivileged people in developing nations.
PoverUp worked as an online platform that used microfinance for social good.
Javas discovered a solution to simplify the notoriously difficult FAFSA application process, allowing students to complete it in just five minutes or less.
The solution involves taking a picture of tax returns and having the app do the tax math to avoid errors.
Javas gained financing and accumulated over 300,000 users for her project called Frank.
Despite initial success, major red flags appeared in 2017 with the Department of Education.
Charlie Javas successfully pitched her company, Frank, to JP Morgan as an acquisition machine with over 4.5 million customers, but when asked to provide the customer list for due diligence, she refused, hiding the fact that there were fewer than 300,000 users.
Charlie Javas pitched her company, Frank, to JP Morgan as having over 4.5 million customers.
She refused to provide the customer list for due diligence, citing privacy concerns.
The reality was that there were fewer than 300,000 users.
Charlie chose to falsify the data to guarantee the acquisition, after a previous bidder withdrew upon seeing the real numbers.
Javas and Amar create a fake customer list, sell it to JP Morgan, but their scam is uncovered when only a small percentage of the advertised emails are delivered and opened.
Javas and Amar create a fake customer list based on real profiles.
They sell the fake customer list to JP Morgan, receiving compensation and bonuses.
JP Morgan discovers the scam when only a small percentage of the advertised emails are delivered and opened.
Javas is found guilty on four separate counts of falsely inflating customer numbers.
Charlie's clean image was an illusion as her previous ventures were not officially registered, had no records of existence, and partners denied any association with her.
Her micro lending platform was never registered as a company, despite her claims of customers and partnership deals.
She falsely claimed to have turned down a Peter Thiel scholarship and cheated during a scavenger hunt challenge for the scholarship trials.
Her next project, Frank, secured $10 million in funding but was also a mess, initially being a job search website that connected young workers with jobs and helped students with aid programs.
Charlie Javas faked her way to the top, but her scam on JP Morgan backfired.
Javas admitted to painting a rosier picture of her company's internal atmosphere than it truly was.
She focused solely on user-based growth, neglecting other concerns.
The fake it till you make it mentality can backfire, especially when economic times turn sour.
00:01hi welcome to another episode of Cold
00:04new people dream about success from a
00:07young age we see the covers of magazines
00:09featuring young entrepreneurs those who
00:12thought different defied the status quo
00:14and decided to embark on a journey that
00:16led them to massive wealth and success
00:18we all know these stories but sometimes
00:21when someone tries to achieve success by
00:23any means necessary it can go very wrong
00:27such is the story of Charlie Javis
00:30on the surface everything seemed
00:32Flawless millions of dollars in funding
00:34from JP Morgan a spot on the prestigious
00:37Forbes 30 under 30 list and support from
00:40industry Titans like a polo CEO Mark
00:43but lurking behind this polished facade
00:46was a network of lies to seat and
00:48flagrant exaggerations for a decade
00:51Charlie carefully crafted an image that
00:54deflected nearly all controversies
00:56but as we've seen previously on this
00:58channel her precious House of Cards
01:00eventually Came Crashing Down could be
01:02facing up to 100 years in prison accused
01:04of defrauding JP Morgan Chase out of
01:07millions Charlie Javis she was a hot
01:09shot in the startup World student scam
01:12students but scammed the bank so who was
01:14she and how did she manage to fool and
01:16defraud one of the biggest banks in the
01:19is the story of Charlie Javis
01:29Charlie's entrepreneurial aspirations
01:31seems to have taken root in her teenage
01:33years she grew up in an affluent New
01:35York family attending a well-known
01:37french-american private school in New
01:39York the idea for her first Venture came
01:42while she was still in high school in a
01:44story strangely mirroring Elizabeth
01:45Holmes she got her first idea after a
01:48trip overseas for Charlie Javas the
01:51destination was Thailand and when she
01:53returned she had the idea to start a
01:55microfinance product
01:57during her visit she recognized that
01:59people in developing nations lacked
02:01access to credit
02:03her solution was to have a service that
02:05offered small low interest and secure
02:07loans to those who are underprivileged
02:09the result was her non-profit called
02:11pover up it worked as an online platform
02:14that used microfinance for social good
02:16to quote and poverty with the click of a
02:19mouse it would work by harnessing small
02:21student contributions to make loans
02:23possible but as we'll later see even in
02:25this all was not as it seems
02:29After High School Charlie pursued a
02:31finance and law undergraduate degree at
02:33Wharton her Venture made headlines
02:35Landing her a feature in ink magazine
02:37they called her idea one of the coolest
02:40College startups
02:41around the same time fast company listed
02:44her as one of 100 of the most creative
02:46people this was the first time she was
02:48able to create media attention as it
02:51would turn out this would be the most
02:52important skill that she had
02:55the recognition caught the eye of the
02:57Peter Thiel Foundation they were
02:59offering students one hundred thousand
03:01dollars to leave college and chase their
03:03entrepreneurial dreams
03:05however according to a cover-up tumbler
03:07post Charlie withdrew from the
03:09competition choosing to stay in school
03:11despite missing out on a hundred
03:13thousand dollars the scholarship bid
03:15earned her significant media attention
03:17way more than before
03:21following graduation Javas began
03:23exploring New Market gaps that required
03:26following several business plan
03:28revisions she finally discovered the
03:30free application for federal student aid
03:32or FAFSA and this is what it is each
03:35year the federal student aid office
03:37distributes over 249 billion dollars in
03:40federal aid to 13 million students the
03:43thing is there's a major issue with it
03:45the application process is notoriously
03:47difficult causing students to leave
03:49billions of dollars unclaimed each year
03:51determined to assist students she
03:54devised a solution that could simplify
03:55the whole process to an application of
03:57just five minutes or less
03:59it's totally free that's really
04:01important to us for all students to
04:03benefit from so a student takes a
04:05picture of their tax returns then we do
04:07all the tax math for you so no math
04:10errors that can put you into very
04:11complicated verification very simple
04:14language we take a flow that might take
04:16hours with the federal government and
04:18most students take four minutes with us
04:20so that's more or less how it works you
04:22see how much you're eligible for then
04:24you can go to school feel confident see
04:26what your bill is and then figure out
04:27the Gap to help you
04:29this was the core idea of what she would
04:31call Frank as she described quote Frank
04:35kind of represented that as a name
04:37because it just meant honest using her
04:39status and connections that she'd gained
04:41from meter exposure she was easily able
04:43to find financing for her project in
04:45just a few years Frank had raised more
04:47than 20 million dollars in funding and
04:50accumulated over 300 000 users
04:53on paper the company looked like a
04:55massive success with Javis seizing every
04:57opportunity to promote herself as an
04:59up-and-coming star of the business world
05:02she reflected her thoughts to Insider in
05:042021 quote I built a business and raised
05:07funds out of college turning down a
05:09finance job even though I was told I
05:11would fail because I didn't have
05:13business experience
05:14but soon major red flags began to appear
05:20in 2017 the Department of Education
05:24issued a cease and assist letter the
05:26reason Frank may be misleading students
05:29into thinking that it's associated with
05:30the government's official website
05:32following the incident the company
05:34changed its marketing to clarify that it
05:36had no affiliation with the US
05:38government but this was just the
05:40beginning of the problems
05:41in December of 2017 Javas wrote an
05:44opinion piece for the New York Times it
05:46was supposed to be on quote the eight
05:48most confusing things about FAFSA the
05:50thing was the article later had to
05:52include a significant correction stating
05:54that there were multiple inaccuracies
05:56about the aid process
05:58now just think to yourself how was the
06:00CEO of a company that specializes in
06:03this exact field able to get so many
06:05things wrong it's not a good look
06:07the general public didn't pay much
06:09attention though because Javas was on a
06:11media tour she frequently appeared on
06:13articles and podcasts so much so that it
06:16culminated in her inclusion on the
06:17Forbes prestigious 30 under 30 list in
06:25by 2021 Javas had begun exploring the
06:28possibility of selling her Venture by
06:30the start of summer the now famous
06:32startup founder was able to secure a
06:34meeting with JP Morgan eager to expand
06:37their presence in the rapidly growing
06:38niche of Student Financial products JP
06:41Morgan saw Charlie javis's Company Frank
06:43as a great way to increase market share
06:46and secure talent to help them grow in
06:48that sector during the meetings Javas
06:51held nothing back and she pitched her
06:52company as quote an acquisition machine
06:55amassing over 4.5 million customers in
06:58just four years
07:00she also claimed that her company knew
07:02quote more about their students than any
07:05lender college or employer
07:07the pitch was a success after a few
07:10meetings she managed to convince JP
07:12Morgan to purchase her company for 175
07:15million dollars it was an amazing Payday
07:17for Charlie
07:19though there was one thing remaining the
07:21bank had to do due diligence and one of
07:23the first items on JP Morgan's due
07:25diligence list to verify those 4.25
07:29million customers that Charlie said she
07:31had amassed at this point it's important
07:33to remember that the bulk of the
07:35company's price had to do with the
07:37quality of their customer base
07:38the higher the number the higher the
07:40price tag that JP Morgan would be
07:42willing to pay
07:44something peculiar happened
07:46Charlie refused to provide the list she
07:49said privacy concerns but there was
07:51another reason for this she was hiding
07:53something the fact was in reality there
07:55weren't 4 million users but fewer than
07:58three hundred thousand
08:02when July 2021 arrived Charlie needed to
08:05present the data for the deal to proceed
08:07she was at a Crossroads now should she
08:10disclose the actual figures and risk
08:12losing a very profitable deal or
08:14fabricate the numbers to guarantee the
08:17you see Charlie was worried because
08:19before JP Morgan there was another
08:21bidder for the company but after they
08:23saw the real numbers they withdrew the
08:25negotiations fearing the loss of another
08:28potential buyer she opted to falsify the
08:30data hoping she could pull it off
08:33according to legal documents quote Javas
08:36chose each time to lie and time and
08:38again she layered fraud upon fraud to
08:41deceive JP Morgan
08:43Javas needed to figure something out and
08:46quickly how was she going to get a
08:47customer database with more than 4
08:49million customer emails this is where
08:51her Chief growth officer Olivia Amar
08:54comes into the picture initially Amar
08:56approached the company's top engineer to
08:58create the fake account but the engineer
09:00smelt a rat and he questioned the
09:02legality of the request
09:04Javas assured him that quote no one will
09:07end up in an orange jumpsuit but the
09:09engineer knew better and he ultimately
09:11refused having no other option Charlie
09:14had a backup she knew a guy a professor
09:17in New York who specialized in quote
09:19Creative Solutions for data problems she
09:22would reach out to him for help
09:24with the professor's assistants they
09:27were able to create over 4 million fake
09:29accounts by using an algorithm the
09:31algorithm created new fake customer
09:33information based on real profiles
09:36after some tinkering they scrape
09:38together a list they held their breath
09:40and sent it off to JP Morgan
09:42surprisingly or unsurprisingly the
09:44banking giant bought it
09:47as a thank you Javas paid the professor
09:50eighteen thousand dollars for his
09:52and now they just had to wait for their
09:54payday but before that they needed to
09:57cover their tracks Charlie ordered the
09:59destruction of the fake customer list
10:00within minutes of a third party
10:02completing their analysis Amar spent an
10:05additional 105 000 acquiring a separate
10:08data set of 4.5 million students this
10:11was a contingency plan just in case the
10:13other data set failed
10:15once the deal closed Javas received 10
10:18million dollars in compensation and was
10:20eligible for an additional 20 million
10:22retention bonus as a managing director
10:24at JP Morgan Amar became an executive
10:27director and received 5 million as well
10:29as a 3 million retention bonus
10:32around that time Charlie went on to
10:34social media to boast that quote it's
10:36not every day that an entrepreneur gets
10:38her fairy tale new beginning not ending
10:40however this illusion of Glory ended
10:43almost as quickly as it began
10:45a couple of months later JP Morgan was
10:48busy integrating Charlie's company and
10:50team into their operations they wanted
10:52to start utilizing that fast customer
10:54base that they acquired in the process
10:56the dispatched advertisement emails to
10:58400 000 Franc customers and here it was
11:02immediately clear that something was
11:04horribly wrong
11:06a mere 20 of emails were even delivered
11:08and an even more minuscule one percent
11:11were opened investigating deeper JP
11:14Morgan discovered the email exchange
11:16with the corrupt University professor
11:18and they were seeing red
11:20both Amar and Javis would be suspended
11:23from their JP Morgan roles and in
11:25December of 2022 JP Morgan filed charges
11:28against them Javas had the goal to
11:30retaliate and counter Sue she argued
11:33that her termination was not just you
11:35know what else isn't just faking your
11:37entire business
11:39unfortunately for her the court found
11:41the evidence against her to be
11:42compelling and in April 2023 she was
11:45found guilty on four separate counts of
11:47having quote falsely and dramatically
11:49inflated Frank's customer numbers and
11:52quote fraudulently induced JP Morgan to
11:55acquire her company
11:58uh now to a high profile fraud case
12:01that's uh literally happening in front
12:03of us in real time the 31 year old
12:05accused of quote falsely and
12:07dramatically inflating the number of
12:08customers that the company had in the
12:11scheme to fraudulently induce JP Morgan
12:13to acquire the startup in 2021 she stood
12:16to gain more than 45 million dollars
12:18from the alleged deception in January
12:20JPMorgan CEO Jamie dimon called the
12:22acquisition of Frank a quote huge
12:24mistake there's a lot of people around a
12:26transaction of these of this size and
12:29not to have any idea that the numbers uh
12:33aren't exactly what uh is being said
12:35kind of go back to FTS you know it's
12:37just shocking that she thought she could
12:39just get away with faking the numbers
12:40and lying taking home the pay packet and
12:43expecting JP Morgan just to not look
12:46if we dig deeper into Charlie's history
12:48we begin to see the real picture and
12:51it's a real doozy
12:56as it turns out her squeaky clean image
12:58was just an illusion as a person
13:00familiar with her would later remark
13:02quote this is exactly what she had been
13:05doing what she had been doing all along
13:07and now she has gotten caught for it
13:10tracing things back to her college Years
13:12remember her first Venture cover up the
13:15micro lending platform for developing
13:16countries well it was never officially
13:19registered as any type of company there
13:22are no records of its existence and this
13:24is despite her bold claims of customers
13:26and partnership deals some of those
13:28Partners have even come out and said no
13:30we don't know who this person is we've
13:32never done a deal with povera or Charlie
13:34Javas despite telling Wharton magazine
13:36in 2013 that pover-up raised three
13:39hundred thousand dollars from friends or
13:40family a former board member confirmed
13:43it didn't distribute a single loan
13:46and remember the Peter Thiel scholarship
13:48that she supposedly turned down well
13:50Michael Gibson who oversaw the grants
13:53stated in a Forbes article quote she was
13:55never offered a fellowship and it
13:57bothers me that she is going around
13:58saying that because of her personality
14:01we didn't trust that she could get
14:02started in a real way
14:04reportedly her team cheated during a
14:07scavenger hunt challenge for the
14:08scholarship trials Gibson commented
14:10quote the funny thing is cheating in a
14:13scavenger hunt is a pretty small thing
14:14but it's weird now she's being accused
14:17of something on a much greater grander
14:19scale it's almost like too much on the
14:21nose he also recalled that one reason
14:23for her rejection from the program was
14:25that she presented her Venture as
14:27ongoing when in reality there was
14:29nothing to show for it of course as was
14:31seen already
14:33despite all these disasters she would
14:35move on to her next project Frank and
14:38secure 10 million dollars in funding
14:40but this company was also a mess
14:42initially it was a job search website
14:45that connected young workers with job
14:46opportunities via text message then it
14:49was a credit score website and finally
14:51it helps students with Aid programs
14:54according to insiders it was a very
14:56Rocky start allegedly the Venture ran
14:58out of money leading Javas to stop
15:00paying her employees and refused to
15:02provide promised Equity bonuses this led
15:05to a lawsuit but this disaster didn't
15:07matter because Javas was a marketing
15:09genius she could rewrite her own
15:11narrative when she would retell the
15:13story she omitted the lawsuit she said
15:15the layoffs were the most difficult time
15:17in her life
15:18so we know that Javis does seem to
15:20manipulate and lie but by the time she
15:22launched Frank she'd gone Bonkers a
15:25person present at the first investor
15:27meeting said that Javis promoted the
15:28product by claiming that they had
15:30thousands of sign ups when they had none
15:33quote we'd all start looking at each
15:35other like this is insanity you can't be
15:38saying these things some of the things
15:40that were being said were just
15:41inexcusably inaccurate
15:43when those same people ended up
15:45confronting her about it Javas would
15:47State quote listen these old people
15:51don't understand this is how it works
15:53you fake it till you make it in one of
15:56her appearances on a podcast she stated
15:58that quote being a Founder I'm obviously
16:01skewed towards being overly optimistic
16:03and sometimes that works to your
16:05advantage sometimes it doesn't and there
16:07were definitely times where I painted a
16:09Rosier picture than things truly were
16:12regarding the internal atmosphere of the
16:14company from her previous mismanagement
16:16experiences testimonies from employees
16:18painted a picture of misery with
16:20management solely focusing on user-based
16:22growth and neglecting all other concerns
16:26as it stands Charlie javis's story
16:28emerges as yet another cautionary tale
16:31drawing parallels with the cases of
16:32Elizabeth Holmes and Sam Beckman freed
16:35in each of these three scenarios their
16:37marketing prowess significantly outshone
16:39their actual management abilities Javas
16:42was marketed as a genius she lied and
16:45faked her way to the top but bit off
16:46more than she could chew when she tried
16:48to scam J.P Morgan and it came back to
16:50bite her in a big way
16:52this is also a vivid reminder of how the
16:54fake it till you make it mentality can
16:56backfire and rapidly on a wider macro
16:59scale this kind of tells us something as
17:01well usually during boom times and
17:04prosperous times unethical Behavior can
17:06easily be overlooked Tech investors are
17:08eagerly jumping on every opportunity
17:10because if they don't they're going to
17:12miss out on the next big thing but when
17:14the economic tide turns and sober
17:16reality returns many are left stranded
17:19and this is precisely the current
17:23the Forbes 30 under 30 list has been
17:25widely ridiculed for showcasing some of
17:28the Decades most notorious fraudsters on
17:30its magazine covers
17:32however the selections themselves may
17:34not be the issue as you know if you've
17:36watched my videos since 2008 until very
17:39recently we have been living in a fake
17:40macroeconomic environment supported by
17:43low interest rates and easy money now
17:45add social media into the mix where
17:47reality and fiction blur and you have a
17:49recipe for individuals that want to take
17:51advantage of the times and craft
17:53narratives for their own fake success so
17:56that is the story of Charlie Javas the
17:58woman who flew too close to the sun
18:00which was JP Morgan
18:02for me scammers and fraudsters have
18:05always been out there but there's
18:06something about the millennial
18:07generation that just seems to be on a
18:09grander scale and much more Brazen if
18:12you've got any thoughts on why I'd be
18:13interested to hear that's just my
18:15opinion though and I'm a millennial
18:17myself so I'm not throwing any shade
18:19all right so thanks for watching hope
18:21you did enjoy that if you did feel free
18:23to look around on the channel there's
18:25plenty of interesting stuff on here on
18:26science technology and business
18:29my name is Togo and you've been watching
18:31cold fusion and I'll catch you again
18:32soon for the next episode cheers guys
18:36have a good one
18:51stop trying
19:01it's me thinking
Chat with video

FAQs about This YouTube Video

1. Who is Charlie Javis?

Charlie Javis is a 31-year-old woman who scammed JP Morgan by falsifying customer numbers and selling her company for $175 million. Her history of lies and deception eventually caught up with her, resulting in criminal charges and a possible prison sentence of up to 100 years.

2. What did Charlie Javis do to JP Morgan?

Charlie Javis scammed JP Morgan by falsifying customer numbers and selling her company for $175 million. This resulted in criminal charges and a possible prison sentence of up to 100 years for her.

3. Why is Charlie Javis facing criminal charges?

Charlie Javis is facing criminal charges due to her history of lies and deception, particularly in relation to the scam she orchestrated at JP Morgan by falsifying customer numbers and selling her company for $175 million.

4. What is the potential prison sentence for Charlie Javis?

Charlie Javis is facing a possible prison sentence of up to 100 years for her involvement in the scam at JP Morgan, where she falsified customer numbers and sold her company for $175 million.

5. What consequences is Charlie Javis facing for her actions?

Charlie Javis is facing serious consequences such as criminal charges and a possible prison sentence of up to 100 years as a result of her history of lies and deception, particularly in relation to the scam at JP Morgan.

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