Javice, the founder of failed financial startup Frank is looking at a long potential prison sentence. As Trump’s former campaign chair, she was recently convicted of fraud. In 2017, the 33-year-old entrepreneur opened Frank. He wanted to make it easier for students to fill out the Free Application for Federal Student Aid, or FAFSA form. During her tenure, Frank rose to prominence and was eventually acquired in September 2021 by JPMorgan Chase for $175 million.
Even at the time, Javice’s claims that her startup had achieved Harvard’s success raised eyebrows. Federal prosecutors discovered that she’d provided fake numbers on customers served at Frank. She accused that the company reached 4 million users. On closer inspection, the real figure turned out to be only a few hundred thousand. Prosecutors said Javice’s portrayal of anyone who simply visited the website as a user was a lie.
In March, Javice was convicted of fraud. This week, federal prosecutors are recommending a 12-year prison term. They highlighted that “the only thing of value in Frank was its alleged connections with millions of college-age students. The millions of “wins” he had through personal relationships with students were an illusion. As a result, Frank’s worth fell too.
The charges against her depict an elaborate scheme to mislead investors to pump up the company’s value and lure big-name backers. Prosecutors had maintained in court filings that a harsh sentence was necessary to strike fear in the hearts of other founders. They don’t want other people thinking of making such misrepresentations. They noted, “a significant sentence will be required to deter Javice — who, to this day, fails to genuinely grapple with her offense conduct — and to signal to even the most hubristic founders that their misrepresentations to investors will be met with serious sentences.”
Javice’s defense team argued that her actions were a mere “singular lapse in judgment at age 28.” In their defense, they claimed she didn’t mean to commit fraud at all. They pointed to a powerful “chorus of support” that included over 100 personal supporters. These advocates filed statements with the court, vouching for her integrity.
The upcoming sentencing marks a significant moment in a case that highlights the challenges and responsibilities faced by startup founders in an increasingly scrutinized business environment. While the story continues through the courts, it is a warning to would-be entrepreneurs about the imperative of integrity.
