Search Here

Charlie Javice, the 33-year-old founder of the student-aid startup Frank, is asking for a new trial after being convicted of defrauding JPMorgan Chase out of $175 million.

Her lawyers say the trial was unfair because both of the judge's law clerks accepted jobs at Davis Polk & Wardwell — the same law firm representing JPMorgan — shortly after her trial ended.

In a motion filed in Manhattan federal court, Javice's legal team argued that the clerks' job commitments created "an appearance of impropriety" that should have been disclosed.

The motion points to moments during the trial when Judge Alvin Hellerstein relied on a clerk's input before ruling on objections.

At one point he said, "My law clerk agrees with you. You can ask the question," which Javice's lawyers claim shows the clerk's influence on key decisions.

Javice was sentenced in September to more than seven years in prison after a jury found her guilty of conspiracy, wire fraud, bank fraud, and securities fraud.

Prosecutors said she tricked JPMorgan into buying her company by claiming Frank had 4.25 million users when it had fewer than 300,000, EconomicTimes reported.

Evidence showed she paid a data scientist to create a fake list of accounts to fool the bank.

But the legal fight is not only about her conviction. It is also about why America's largest bank is paying more than $142 million of Javice's legal bills — even though she scammed them.

Charlie Javice's Legal Fees Spark Controversy at JPMorgan

Under the terms of JPMorgan's 2021 deal to buy Frank, the bank agreed to indemnify Javice, a common clause that protects executives from personal financial ruin during legal disputes tied to their work.

Because the fraud allegations are connected to the acquisition, JPMorgan is still responsible for her defense costs, even after conviction.

According to the NY Post, the bank says the billing has been outrageous. In a Delaware court filing, JPMorgan accused Javice and her lawyers of treating the fee agreement like a "blank check."

The bank claims her team billed for items such as luxury hotel upgrades, personal hygiene products, and even cellulite butter.

One lawyer allegedly billed 24 hours of work in one day. A spokesperson for Javice denied the more extreme claims, saying she did not personally submit the bills.

So far, Javice's legal fees total about $74 million, while her co-executive Olivier Amar's bills push the combined amount past $128 million. JPMorgan is now trying to stop the payments, calling the charges "extreme abuses."

Tags

JPMorgan