US charges second Frank college aid executive with defrauding JPMorgan
Reuters
Published Jul 12, 2023 01:38PM ET
Updated Jul 12, 2023 03:06PM ET
By Luc Cohen
NEW YORK (Reuters) -U.S. prosecutors on Wednesday unveiled an indictment charging a second former executive of college financial aid startup Frank with defrauding JPMorgan Chase (NYSE:JPM) into buying the company for $175 million.
Olivier Amar, 49, who was Frank's chief growth officer, was charged with wire fraud, bank fraud, securities fraud and conspiracy.
Frank founder Charlie Javice, 31, was arrested in April and later pleaded not guilty to the same four counts.
Lawyers for Amar, whose whereabouts were not immediately known, did not immediately respond to a request for comment. A spokesman for the U.S. Attorney's office in Manhattan also did not immediately respond to a request for comment.
Federal prosecutors have said that Javice repeatedly lied about Frank to the largest U.S. bank, including by claiming that she had lined up 4.25 million student customers when in fact she had data for only about 300,000.
JPMorgan has said it learned of Javice's fraud after sending marketing materials to people whom she claimed were real, and finding that just 28% were delivered and 1.1% were opened, far fewer than in other similar campaigns.
The bank shut down Frank in January, and Chief Executive Jamie Dimon branded the acquisition a "huge mistake."
Separately on Wednesday, the U.S. Securities and Exchange Commission added Amar as a defendant to its civil lawsuit against Javice.
The SEC said Amar bought "sham lists" of college students' data from third-party providers that Frank falsely passed off to JPMorgan as customers.
In December, JPMorgan sued Javice and Amar in federal court in Delaware.
Javice filed counterclaims in February, accusing JPMorgan of harming her reputation and withholding about $28 million of payments. She and Amar are seeking to dismiss the bank's claims.
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Written By: Reuters
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