Charlie Javice, the 31-year-old founder accused of lying to JPMorgan Chase to get them to buy her startup, is in talks with U.S. Prosecutors.
JP Kernisan, an attorney for Javice, has held discussions with assistant U.S. Attorney Dina McLeod for a “possible disposition of this case,” according to a letter released by the Department of Justice Thursday. The DOJ has requested a 30-day continuance, until June 2, to continue talks and reach a disposition of the case, a second letter said.
The letter reads in part: “JP Kernisan, Esq. Counsel for Javice, and the Government, have had discussions
regarding a possible disposition of this case. The negotiations have not been completed and defense
counsel and the Government plan to continue our discussions, but do not anticipate a resolution
before the deadline under the Speedy Trial Act expires on May 3, 2023.”
A possible disposition means the parties are working on a resolution, which could involve a dismissal of the charges or a plea, said one criminal attorney, who could not speak on the record. “It’s not normally a dismissal. When it’s a disposition, it’s usually terms and conditions of a plea, which could include negotiating a plea to a more favorable charge,” the attorney said.
Lynette Byrd, a criminal defense attorney with law firm Oberheiden, who is also a former federal prosecutor, said the Speedy Trial Act only applies to criminal, and not civil, charges. The DOJ is most likely signaling they are negotiating a plea resolution, Byrd said. “It would be very unlikely for the DOJ to voluntarily dismiss the case. That’s an extremely rare outcome. Once a person is identified as a [DOJ] target, it’s very unlikely that a person would walk away from a case by dismissing it either through a plea or otherwise,” she said.
Javice’s attorneys have not held talks for a plea agreement or to settle the charges against her, a person familiar with the situation said.
In September 2021, JPMorgan Chase acquired Frank, a financial aid site founded by Javice, for $175 million. The bank has since claimed that Javice lied about the number of customers Frank had at the time, and has sued Javice for securities fraud. Javice has maintained throughout that JPMorgan knew exactly what it was buying.
The DOJ then arrested Javice in April, claiming she “falsely and dramatically” inflated the number of customers Frank had in order to induce JPMorgan to buy the startup. Federal prosecutors slapped Javice with separate counts of conspiracy to commit wire and bank fraud, wire fraud, and bank fraud, each of which carries a maximum sentence of 30 years in prison, according to the lawsuit. She was charged with one count of securities fraud, which carries a maximum sentence of 20 years in prison. The Securities and Exchange Commission, in a separate lawsuit, also charged Javice with fraud for making “numerous misrepresentations” about Frank’s users.
