Former Frank College financial aid startup executive Olivier Amar was indicted last week and accused of helping defraud JPMorgan Chase into buying the company for $175 million, according to court documents.
The four federal charges filed against the startup’s director of growth — wire fraud, bank fraud, securities fraud, and conspiracy — were added to a case against the startup’s founder, Charlie Javice.
Amar, 49, the second Frank employee to be charged, pleaded not guilty Thursday and was released on $1 million bail.
Javice, 31, was arrested earlier this year and charged with the same four counts of fraud. She also pleaded not guilty and was released on bail.
Separately, the Securities and Exchange Commission added Amar as a defendant in its civil lawsuit against Javice, which also alleges fraud.
Lawyers for Javice and Amar did not respond to NBC News’ request for comment.
Javice and Amar hired a data scientist to fabricate a list of users that appeared to show that the company had 4.25 million student customers when JP Morgan requested evidence to back up Frank’s data, according to the Securities and Exchange Commission complaint. The company had fewer than 300,000 users, according to the complaint.
According to the filing, Javice sent Amar a WhatsApp message about the data scientist in 2021, saying, “I found my genius. He says it will take an hour.[.]Amar responded, “great.”
Javice then paid the data scientist $18,000 for his services, the complaint says.
The defendants also created a list of real names that could be falsely posed as Frank’s clients, and Amar arranged for the company to pay a third-party data compiler $105,000 for its data on college students if the scientist failed to provide the data. manufactured. list of users, the complaint said.
JP Morgan learned of the alleged scheme when it sent an email marketing campaign to Frank’s list of purported clients, and generated very few responses, according to the SEC complaint.
Javice, 31, founded the company in 2017 and was acquired by JPMorgan Chase in 2021. As part of the acquisition, the bank also hired Javice and Amar.
JPMorgan closed Frank in January 2023.
Javice received more than $21 million for selling his stake in Frank to the bank and an additional $20 million as a retention bonus, prosecutors said.
Amar received $5 million from the merger, as well as an employment contract that included a $3 million retention bonus, according to the SEC complaint.
Last year, JP Morgan sued Javice and Amar in federal court in Delaware alleging fraud and accusing the duo of lying about Frank’s size.
