JPMorgan Chase is required to cover a substantial $115 million in legal fees for a woman convicted of deceiving the bank by making exaggerated claims regarding her startup.
The defense’s bill is about two-thirds of the $175 million JPMorgan shelled out in September 2021 for Charlie Javice’s company Frank.
Javice obtained the investment through false representations, asserting that her student loan planning company had 4.25 million customers, whereas the actual number was under 300,000.
The staggering cost of her legal fees was revealed last week when Javice, 28, was sentenced to seven years in prison for the fraud.
During the trial, a total of 35 lawyers represented Javice and her co-defendant, Oliver Amar, who was her chief growth officer at Frank and was also convicted.
JPMorgan found itself compelled to finance the legal defense of Javice and Amar because they were employed as bank executives when their fraudulent activities were uncovered.
Although JPMorgan dismissed the duo and attempted to evade this responsibility by suing them, a Delaware judge determined in 2023 that the Frank merger agreement required the bank to pay their legal fees.
In January 2023, JPMorgan CEO Jamie Dimon said the acquisition of Frank was ‘a huge mistake’.
Kevin O’Brien, a former federal prosecutor now defending white collar defendants in New York, remarked to Bloomberg that $115 million for a legal defense is a ‘huge, huge number’.
Charlie Javice, who was sentenced to seven years in prison last week, had her entire legal defense bankrolled by JPMorgan to the tune of $115 million. This sum will only grow if the bank is required to defend her during the appeals process
Jamie Dimon, CEO of JPMorgan, called it a ‘huge mistake’ to buy Frank, Javice’s financial planning website for students. Javice and her co-defendant Oliver Amar created fake user data to inflate the number of customers they had to 4.25 million, when it was actually fewer than 300,000
Javice and Amar’s costs dwarfed those of Elizabeth Holmes, the fraudster behind phony blood-testing company Theranos, who paid at least $30 million to defend herself according to a court filing before her November 2022 sentencing.
It is unclear why their costs soared so high, but JPMorgan has argued that it was being overbilled primarily by Alex Spiro, the $2,025-an-hour Quinn Emanuel partner known for representing Elon Musk.
JPMorgan may be on the hook for even more legal costs, since Javice and Amar were sued by the bank itself and the Securities and Exchange Commission.
Those civil suits will remain on hold until the criminal case comes to an end, which will only happen once Javice exhausts her appeals of her conviction and sentence.
In a Monday filing with the court, Javice’s lawyers said they expect JPMorgan to cover the costs associated with her appeal as well.
US District Judge Alvin Hellerstein ordered Javice to repay JPMorgan $287.5 million in restitution, but even if the order isn’t chipped away at by the defense, the bank will almost certainly never see all of that money.
Javice is only required to pay 10 percent of her income toward the order after she leaves prison, according to a court filing. The order also expires in 20 years.
In March, a New York jury convicted Javice and Amar for cooking up an elaborate scheme to hoodwink JPMorgan to acquire their site, which offered a free tool to help college students fill out financial aid applications.
Javice (pictured leaving court in March 2025 after she was convicted) is appealing her conviction and sentence with the help of high-powered appellate attorney, Alexandra Shapiro, who also represents FTX founder and CEO Sam Bankman-Fried and Sean ‘Diddy’ Combs
Olivier Amar, who was convicted on all the same charges as Javice, is scheduled to be sentenced on October 20
A data scientist testified that Javice paid him $18,000 to create ‘synthetic’ user data comprised of false phone and social security numbers to show JPMorgan.
One of the main arguments the defense mounted was that JPMorgan did not do its due diligence in evaluating the merits of the deal.
Judge Hellerstein did not buy this, once stating that he was focused on Javice’s conduct, ‘not JPMorgan’s stupidity’.
Javice will remain a free woman during the appeals process after convincing the judge that her previous charitable works and fertility struggles warranted bail.
Alexandra Shapiro, one of the nation’s most prominent appellate attorneys, will help Javice try to reverse her conviction and sentence.
Shapiro also represents FTX founder and CEO Sam Bankman-Fried and Sean ‘Diddy’ Combs.
In several letters to the judge, Shapiro said Javice plans on spending her time before prison trying to start a family with her partner.
‘If there is a chance for it to succeed. I want to give it to her,’ the judge said.
Amar, who was convicted on all the same charges, is scheduled to be sentenced on October 20.
