JPMorgan Paid $175 Million for a Business It Now Says Was a Scam – The New York Times

There, she was on financial aid, and she found the forms confusing. So did her parents, according to an interview she gave to Diversity Woman magazine — including her father, Didier, who has worked on Wall Street for more than 35 years, with 11 years at Goldman Sachs and three at Merrill Lynch, according to his LinkedIn profile. Ms. Javice, her father and her mother, Natalie Rosin, did not respond to questions about how Ms. Javice had qualified for financial aid and the struggles to obtain it.

“The whole thing never made sense to me or my parents, who both have master’s degrees,” Ms. Javice told the publication. And according to an article in The Daily Pennsylvanian, the family’s appeals for more aid would take the entire semester to settle, repeatedly. (A Penn spokesman, Ron Ozio, said it would be “highly unusual” for appeals to take an entire semester and that they normally take four to six weeks.)

Ms. Javice has said she graduated from Wharton in three years while often taking five classes at once. The school would only confirm that she had a Bachelor of Science in economics with a major in finance and a second major in operations and information management. It does not comment on the financial aid status, if any, of students.

According to state legal filings, Ms. Javice incorporated her first company, TAPD, in 2013. There is no mention of it on her LinkedIn page, but she has spoken about this pre-Frank start-up some in the past.

In a now-deleted interview on Medium from 2020, she spoke of the attempt at TAPD to come up with a better way to judge the creditworthiness of people just getting started in life.

Credit scoring involves complex state and federal regulations, and after 18 months, Ms. Javice realized that building a new system and complying with the rules would be too expensive. “I fired all my employees,” she said in the Medium interview. “It was the worst thing I’ve ever had to do. A lot of my employees were close friends and still won’t talk with me to this day.”

From all of this struggle, another start-up was born. In 2016, a message appeared on frankfafsa.com promising “Maximum financial aid, guaranteed,” and adding: “If we don’t save you at least $1,000 of tuition, we’ll refund you. Go Premium for $10/month. Cancel anytime.” At the bottom was an invitation to join a wait list.

So what could JPMorgan have seen in the company?

Clearly, it liked Ms. Javice. In fact, the bank planned to pay her a $20 million retention fee if she stuck around for a stretch of time after the merger closed.

Soon after the merger closed, the bank took its shot and sprayed a portion of Frank’s customer list with solicitations. Of 400,000 outbound emails, only 28 percent arrived successfully in an inbox, compared with the usual 99 percent delivery rate. Moreover, just 103 recipients clicked a link to Frank’s website. It was, as the bank put it in its legal filing, “disastrous.”

An investigation ensued, and the bank dived into Ms. Javice’s Frank email account. There, it found a litigation mother lode. The messages, according to the bank, included copious evidence that she had hired a data science professor to create fake information to prove to the bank that the millions of customers Frank claimed to have were real.

Highlights from the emails also included a Frank engineer’s questioning of Ms. Javice’s data manipulation request. She responded that she didn’t think anyone would end up in an “orange jumpsuit” over it, according to JPMorgan’s complaint against Ms. Javice and Mr. Amar.

Nicholas Biase, a spokesman for the U.S. attorney’s office for the Southern District of New York, declined to comment on whether it had opened an investigation into JPMorgan’s claims.