Scamfluencers - Charlie Javice: Fake It Til You Make It | 197

Episode Date: January 19, 2026

In the early 2000s, Charlie Javice dreamed of saving the world… and getting rich in the process. Backed by privilege and proximity to power, she raised money for a series of startups that claimed to help people in need – culminating in Frank, a company designed to help students access financial aid. But after years of playing the “fake it ‘til you make it game,” a big bank finally calls her bluff. Instead of backing down, Charlie doubles down – even with prison on the line.Be the first to know about Wondery’s newest podcasts, curated recommendations, and more! Sign up now at https://wondery.fm/wonderynewsletterListen to Scamfluencers on the Wondery App or wherever you get your podcasts. You can listen early and ad-free on Wondery+. Join Wondery+ in the Wondery App, Apple Podcasts or Spotify. Start your free trial by visiting wondery.com/links/scamfluencers/ now.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Sachi, I think our age group was kind of coming up around the time when, like, very certain nerds became obsessed with the idea of, you know, having a startup. Did you know any of these kinds of people? Sarah, I dated one. Oh, my God. Yeah, I know. He wore a pukeshell necklace. I'm so sorry. Thank you.

That's really, must have been really scary for you. It was pretty hard, and I feel really brave for having gone through it at such a young age. I feel like I found it particularly insane because it was obvious these people weren't just trying to get rich. It was like they wanted to really cosplay as like, I'm a brilliant weirdo who wears the same thing every day, you know? Yeah, it's not enough to be successful. They have to be unique in their success. And it usually means that they don't do anything at all. Yes.

Well, today I'm going to tell you about a woman who thinks founder is a proper name. and an entire identity. And when it came time to choose between changing the world and making her fortune, she robbed one of the biggest banks in the world in plain sight. It's April 2012, and Michael Gibson is in San Francisco filming a CNBC reality competition show called 20 Under 20, Transforming Tomorrow. Michael is a young, handsome guy with a beard and tousled hair. He's a vice president of grants at the team.

Teal Foundation, which is run by Peter Teal, the infamous right-wing tech investor. Today, Michael is serving as a mentor to around 50 eager, ambitious young entrepreneurs who are competing to win a fellowship from the foundation. The fellowship comes with $100,000, which the winners can use to fund their startup, plus they'll have access to powerful mentors. But there's a catch. Teal Fellows are expected to dedicate two years to the program, so they either have to skip college, or drop out.

The competition attracts a lot of oddballs, but even in this crowd, one contestant stands out. A young woman named Charlie Javise. Charlie is a student at the prestigious Wharton Business School at Penn. She's 20 years old, with long brown hair and piercing blue eyes. At first, Michael is intrigued. He gets the sense that Charlie thinks she's better than everyone else and is a bit too comfortable name-dropping.

But those aren't necessarily bad things in the cutthroat tech world, or on reality TV. The contestants compete in a series of challenges meant to test their grit, teamwork, and ideas. Today's competition includes a scavenger hunt, but Charlie decides she doesn't want to collaborate with any of her teammates. The judges on the show later alleged she blew it off entirely to go shopping. The next day, Charlie's attitude gets even worse. The contestants have to pitch a panel of judges. But during her presentation, she refuses to play by the rules. She walks away from the podium, even though she was warned, that would mean no one could hear her.

And then she goes over the two-minute time limit. The judges have to cut her mic. Uh, obviously, none of this is great behavior. but I have to say, she sounds like reality TV gold. I'm rooting for her somehow. Well, the judges think Charlie is off-putting and cocky. One of them says, quote, I didn't see a single bit of humility.

But Michael stands up for Charlie. He said her aggressiveness could be an asset. She's pushing boundaries and going after what she wants. Still, Michael and the other judges aren't sure what she's actually done since she started her company. Charlie's project aims to lift people out of poverty through microloans. She claims she's built a microfinancing curriculum that's been taught in Bay Area schools. But when it comes to actually providing loans, it seems like her company is mostly just a landing page.

How can they be sure she can run a successful startup? The final nail in the coffin is that Charlie doesn't seem to think a teal fellowship is worth all that much. Even like try to explain the fellowship and I'm like, wait a second, what crazy? person would take this. Two years, is it really worth 100 grand? Like, really, I've made a network that's if not comparable, if not better than what Teal is to offer me only in Silicon Valley. I'm happy for her. She seems to live free because she is dumb. Because that's just, like, not true and also not a smart thing to say on a show like this. It's kind of awesome. Unsurprisingly, Charlie doesn't get the fellowship.

But a couple of months later, Michael sees a Tumblr post from her company, claiming that she quit the competition because she didn't want to drop out of college. The blatant lie pisses Michael off. But he was right about Charlie's attitude. Her relentless self-promotion and aggressive personality are attractive to backers. Soon, Charlie will convince some powerful supporters that she might be a unicorn, and they'll entrust her with hundreds of millions of dollars. But Charlie's grand ideas will turn out to be nothing but fantasies.

From Wondry, I'm Sarah Hagi. And I'm Sachi Cole. And this is scam influencers. Like a lot of smart, ambitious young people in the early 2000s, Charlie Javis wanted to save the world and get filthy rich doing it. And thanks to her proximity to power and privilege, she charmed investors in the financial media, raising money and attention for a series of companies that claim to help people in need.

But after years of playing the Fake It Till You Make It game, a big bank finally calls her bluff. But Charlie's willing to lie through her teeth, even when facing down serious prison time. This is Charlie Javis, fake it till you break it. Charlie Javis is born in 1992. Her dad is a banker from France, and her mom, Mom gets degrees in education and substance abuse counseling and later runs a life coaching business. The two divorce when Charlie is eight years old. After that, Charlie and her younger brother split their time between each parent's modest house in Westchester County, a wealthy New York suburb.

Though her family isn't as rich as many of their neighbors, Charlie and her brother still enjoy plenty of privileged perks. She attends a private French language school where tuition starts at 34. $4,000 a year. She spends summers in Israel and Paris, where she develops a love of fashion. She's also a horse girl. Ah, yes. Only the richest amongst us get to be horse girls. The rest of us have to settle for different animals.

Yeah, I mean, if you have a horse, you're rich. Even if you have, like, an interest in horses. Like, understanding the concept of a horse is socioeconomically middle class. Even imaginative proximity to a horse is wealth. Yes. Correct. Well, Charlie's school is a typical upper-class institution full of very rich, very ambitious kids. At one point, her father gives a speech at the school

about how students could build their own businesses. This is an ethos Charlie seems to take to heart. She seems to learn early on that she can stand out by being scrappy, forging her own path, and knowing how to work the system. Charlie's grades aren't amazing, but she balks up her college applications by starting a community soup kitchen and spending a summer teaching English along the Thailand-Mianmar border. This volunteerism trip doesn't just look good on her resume.

It also feeds her ambition. When she comes back, Charlie decides to become a teen startup founder. She's inspired by a recent Nobel Prize winner, Bangladesh economist Mohamed Eunice. Muhammad is a godfather of something called microlending. Sachi, do you know what that is? It sounds like teeny tiny loans, like cute little baby loans. Yeah, they are small. So basically the idea behind microlending is that small amounts of money, like $100,

can make a huge difference for entrepreneurs in developing countries. In theory, it helps lift people out of poverty with relatively low risk for investors. And because many of the businesses are owned by women, microlending is also seen as a way to advance gender equality around the world. And since the buy-in amounts are small, students and young people can meaningfully participate too. Charlie wants to build an online platform to help students find microlending opportunities, start microfinance clubs, and even connect with clubs at other schools. She calls the company, Pover Up, presumably because she's helping lift

people up from poverty. All of this, by the way, is happening before she even graduates high school. Like a lot of young people at this time, Charlie believes that a young person with a dream can change the world and make a lot of money while doing it. Now, all she needs to do is convince other people to invest in her idea. It's 2009 and Howard Finkelstein is at an NYU event for the Microfinance Club of New York. But Howard isn't a student. He's a middle-aged lawyer with a gray beard and a round face, and he specializes in helping enthusiastic tech entrepreneurs navigate government regulations, hiring, and fundraising. This event has attracted a lot of young, ambitious, would-be changemakers. But one of these

people stands out to Howard. She's effortlessly chatting with adult executives. When Howard talks to her, she shakes his hand and introduces herself as Charlie Javis. Charlie tells us, tells Howard about Pover Up. She says that when she was volunteering in Southeast Asia, she saw how far a couple hundred bucks could go. And she believes American students can play a big role in helping launch entrepreneurship opportunities around the world. She says she wants to end poverty with a click of a mouse.

She'll later tell the Philadelphia Business Journal she wants Pover Up to be, quote, the Facebook of Microfinance. So, like, very fundamentally, I don't really know. what that means, but I do think that sucks. Because like, Facebook's bad. I think we've all agreed the Facebook of anything is like not good. So this is just not an apt metaphor for something non-evil. Yeah, I think she's saying, I want this to be the thing that makes me the richest I could possibly be. Yeah. This might sound a little grandiose, but at this moment, microfinance is really popular

and Howard is inspired. He thinks Charlie is funny, opinionated, and driven. She's got a unique angle on a huge global trend, and she's ready to get things going as quickly as possible. Maybe too quickly. After Charlie asks Howard to help her launch Poverup, he finds out she's only 17. He tells her she needs to get her parents' permission first. That's not a problem for her.

As Howard helps get Poverup off the ground, he notices that Charlie has her dad wrapped around her finger. Her dad, Didier, sits on Poverer up. up's board and during one meeting, she openly challenged him. But Didier wasn't angry. He was proud. Charlie's mom, meanwhile, posts supportive updates about her daughter on social media. And although Howard never acknowledges this directly, this is a period where people are eager

to boost entrepreneurial young women. So eager that they sometimes skip out on doing their due diligence. It's the era when Elizabeth Holmes is raising tens of millions of dollars for her biomedical testing company, Theranos, and having the kind of meteoric rise Charlie dreams of. Charlie is about to make a big step toward making that dream real. Howard is delighted when he learns she's been admitted to one of the most prestigious business schools in America, the Wharton School at the University of Pennsylvania. It's the perfect place for Charlie to learn the fundamentals of running a startup.

But instead, she's going to focus on a different major, promoting her personal. personal brand. Once Charlie gets to Wharton in the fall of 2010, she really gets to work building Poverup. She becomes one of the first ever freshmen invited to join a student startup incubator. She's also part of the student entrepreneurs club, which operates out of a sparse co-working space and offers students tantalizing perks like tap water and occasional air conditioning. Charlie claims to be taking classes at the law school and in the MBA program. on top of her core curriculum.

She says she's doing some social impact consulting as well, but she's just as focused on building her personal and professional brands, including name-dropping and embellishing details to make Pover-Up sound bigger than it actually is. Some people buy the hype. When she's a sophomore, Inc. Magazine ranks Pover-Up as one of the 11 coolest college startups. A month later, she gets listed as one of fast companies,

100 most creative people in business. And around this time, Poverup is doing well enough to open an office in Manhattan. But the world is starting to move on from Charlie's business model. News outlets suggest that instead of escaping poverty,

some microfinance borrowers fall into crippling debt and are even driven to suicide. None of these cases are related to Poverup, but investors start cooling on microfinance in general. And when one journalist asks Charlie how Pavrupp will protect borrowers, she says she believes her company's core values will prevent anything like that from happening. One thing I think I always knew, but maybe has been solidified by this show,

is that anytime someone talks about their company's core values, something has gone wrong. Like, if you have to pull out that bullshit line, oh, uh-oh, you're probably getting indicted. Yeah, I mean, also it's like, so what are they? Like, yeah, what does that even mean? What does that mean? It's total bullshit. And also, it's not just that Charlie is naive or that the microfinance boom is cooling off. She simply doesn't have the resources to build the technology she needs.

She outsources the work to a team in India, but it takes a long time to get everything set up, which leaves Charlie on the back foot. Still, she knows how to win people over. About a year later in 2012 is when she's invited to compete for a Tille Foundation Fellowship. That's the reality show moment from earlier in the episode. And while she doesn't make the cut, she makes connections with famous investors and organizations like the Harvard Leadership Institute. A few months later, Charlie tells Wharton magazine that Poverup has raised $300,000 and that she's basically batting away investors with a stick.

Her goal is for Poverup to operate on more than 500 campuses and make $10 million worth of investments by 2016. She says they're working on partnerships with business development groups in the South Pacific and Latin America and with a global solar-powered lantern company. They plan to launch the platform with five initial investment projects. But there's still a huge amount of work to do. And from Charlie's perspective, her staff doesn't take Pover-Up seriously enough.

Relying on students means they're often busy with midterms, papers, and other activities. Even after all the attention and enthusiasm, Poverup never really kicks into gear. Charlie eventually abandons the company during her senior year before she graduates in 2013. Years later, at least one of the organizations Charlie claimed was working with Poverup told Forbes, it had no record of any partnership. and one of Poverup's board members says the company never gave out a single loan. Charlie's first major project has also become her first major failure. But she still has an entrepreneur spirit.

She's not ready to give up. She just needs her next big idea. Soon after Charlie graduates, she starts a new company called TAPT, spelled T-A-P-D. It's supposed to help creditors decide, whether they should loan money to young borrowers. Basically, Charlie wants to reinvent the credit score. By 2015, she's ready to take meetings with potential investors. But in these meetings, she never actually explains how TAP is supposed to work

because she doesn't know herself. Poverup was supposed to hand out tiny loans, and it never even got off the ground. Now, Charlie is trying to disrupt a massive industry regulated by complex state and federal laws. And she's trying to raise $10 million, which is a lot of money, but nowhere near enough to build a compliance-ready credit product. By the time Charlie realizes that she's taken on an impossible task, she's burned through half a million dollars.

And she even has to fire almost her entire staff, including several friends. A few of these friends never speak to her again. Have you ever been laid off by a friend? I was thinking about this. and like if you can kind of like get it together to stay friends after. I haven't, but I feel like I've been laid off by, you know, a manager I've been friendly with, but also like it wasn't their choice. So. Yeah.

I have been laid off by a friend, but only because of forces out of their control. I've never been laid off by a friend who like owned the company and fucked up. And yeah, I probably wouldn't be able to talk to them again. I wouldn't talk to them ever again. Yeah. I was just like, I can't do it. I'm sorry. Yeah.

I will sabotage you and probably kill you one. day if we stay friends, you know? Correct. Good to know. I love when you reveal thyself. You would too. Well, Charlie has failed a second time, but instead of reconsidering her dream of being an entrepreneur, she treats it as a learning experience. She pivots again, this time, into student loans. Charlie wants to streamline the financial aid process for American college students, the U.S. Department of education oversees the free application for federal student aid or FAFSA. But FAFSA can be a tough process to navigate, so Charlie wants to build an easy-to-use website that will help students secure the best possible loan package.

She's basically trying to do for FAFSA what TurboTax does for filing your taxes. And to be fair, Charlie is trying to solve a real problem. Even Bill Gates has spoken out about how complicated FAFSA is. and Charlie knows all about it from personal experience. She says she struggled to navigate the financial aid system at Wharton. Her parents stopped sharing financial information with each other after their divorce, which made it harder to fill out loan applications. And on top of that, her dad lost his job during the 2008 financial crisis.

Charlie claimed she spent six months fighting with the university's financial aid office trying to get a better deal on calls that occasionally left her mother in tears. Here's Charlie describing the ordeal on the Ed Up Experience podcast. It was so painful. I got in early to the school that I went to and trying to actually, like, potentially not be able to enroll because of financial aid. To the school of my dreams was just, like, completely heartbreaking. Sarah, we talk about this all the time that, like, the American school system is so complicated and it asks so much of teenagers. Yeah.

And like Charlie has firsthand experience with like a real problem, but she's also contributing to a cottage industry of people trying to exploit other people because of this problem. Like this is not a real solution. Yeah. I mean, it's not even close to real solution, but, you know, she'd have to like have good politics to find the solution to this. And for what it's worth, this might be slightly exaggerated. Years later, a representative from Penn says it's highly unlikely the process would have taken as long as Charlie says. Either way, this story perfectly fits the pitch for her new startup. For this company, Charlie finds a partner through her connections in Israel. His name is Adio Menzzi, and in mid-2016, he becomes a co-founder and chief technology officer in exchange for 10% equity in the company.

A couple of months later, they open an office in Israel. and Adi becomes the vice president of research and development. By August, they have a very basic website where students can join a wait list, and they have a new company name, Frank. Charlie picked it because she wants the name to evoke honesty and transparency. You know, like being Frank.

She also wants to conjure the image of a friendly, helpful uncle. They haven't actually built the platform yet, but Charlie tells investors that thousands of students have signed up. She doesn't think she's doing anything wrong. Startups are all about faking it until you make it. That sounds bad, but I do think that's probably true. But it doesn't feel good to say. Oh, yeah.

I mean, I think that is kind of how people who do startups see it all, right? Mm-hmm. And in March 2017, the company completes a $5.5 million fundraising round. But one of the investors, an early backer of WeWork, recommends replacing Adi. And just a few weeks after the fundraising round closes, Charlie fires him. She tells him he isn't meeting her expectations for a VP and that his software is faulty.

But the timing is hard to ignore. In June, Charlie learns that Adi is suing her in Tel Aviv for failure to pay wages and refusing to hand over the 2.5 million shares he's owed. Maybe Charlie was willing to throw her partner under the bus to chase investor money, or maybe she was taking the advice of a more, experienced an influential advisor. Either way, at the tender age of 25, Charlie is already learning the highs and lows of being a founder,

and she's dead set on recapturing the hype she once had and finally becoming the success she believes she should be, no matter what. With her initial funding secured, Charlie spends the rest of 2017 raising a reported 10 million for her student aid startup. By now, Charlie has a new motto, profit for purpose. She's honed her skills as a tech founder and fundraiser. She talks about seeing her mom cry while dealing with Wharton's financial aid office

and says that her Holocaust survivor grandparents always emphasized the importance of education. When she pitches potential investors, she explains that Frank will be free for students with most of the money coming from universities who will pay to use the program and be a few featured school on the site. Plus, there's also Frank Premium, which costs users $10 per month and guarantees $1,000 in tuition savings. Frank has already launched a tool that helps students apply for financial aid. The company will also offer students cash advances on their financial aid, help them appeal

their aid offers, and even offer accredited online courses. Investors eat it up. She also brings in a private equity billionaire, who ends up joining Frank's board. This all helps to legitimize Charlie's business and attract more money. Charlie also finds a new right-hand man, a Canadian businessman named Olivier Amar.

Olivier has a close-cut beard, bushy eyebrows, and deep brown eyes. He's been living in Israel with his family and running a data privacy startup. But he picks up his whole life and moves to the United States to work as Frank's chief growth. acquisition officer. Soon, Olivier and Charlie become very close.

Olivier is loud and aggressive. He's constantly hyping Charlie up and goes after anyone who disagrees with her. They grow so insular that they start ignoring any outside opinions. And yes, their relationship is weird, but not for the reason you might be thinking. Olivier is married with kids, and he and his wife refer to Charlie as their honorary daughter. That kind of intimate language is so weird, and people use it in workplace settings all the time, and it's always weird. But this kind of like instillor relationship feels like a really fertile ground for fraud. Yes, absolutely. It's not professional. That isn't how people are supposed to work together. Yeah. Things are looking up for Frank, but the company still faces some roadblocks.

The Department of Education sends them a cease and desist letter accusing Frank of violating Faf's trademark. They claim that Frank's website, Frankfsa.com, could confuse students looking for the actual FAFSA application website. Charlie agrees to change the URL to WithFrank.org and to publish disclaimers clarifying that Frank is not affiliated with the Department of Education. And the rebrand comes with a perk. The dot-org address actually makes Frank sound less like a startup and more like a benevolent nonprofit.

Towards the end of 2017, Charlie rolled up. rolls out Frank for the media. She writes an op-ed for the New York Times about the complexities of the FAFSA process and why a platform like Frank is needed, but the piece is riddled with so many errors that the Times has to add a 117 word correction. The rest of tech and business media

doesn't seem to care that Charlie doesn't know what she's talking about. She becomes a regular on CNBC and appears on lists of promising young entrepreneurs, including Forbes's infamous, 30 under 30. She's interviewed by the Wall Street Journal and profiled in Business Insider.

It's not hard to see why people like interviewing her. Charlie gives great sound bites. In one interview, she says her favorite quote is from the Will Farrell movie Taladega Nights. Always remember, if you ain't first, you're last.

I think it's really beautiful that she's joining the rich pantheon of tech ding-dongs who don't understand satire. Yeah, and also, like, I hate when these tech people try and have personalities. You don't have one. You don't have one. Just be weird. Just be quiet and weird, you know?

You might expect Charlie to overcompensate by being a hardass, but by most accounts, she's actually a pretty good boss to her 18 employees. Years later, some of them describe her as friendly, laid back, and sincere in her desire to help students. The staff are paid well, and they all believe in the members. mission. Sure, Charlie buys into the founder aesthetic of wearing jeans and hoodies most of the time, but she also takes the women in the office to get their nails done in the middle of the day. Throughout all this, Charlie is still projecting success. Towards the end of 2018, she tells Business Insider that Frank has helped 300,000 students access $7 billion in financial aid.

And we don't know for sure that this is inflated, but if it's accurate, it means each of those students got, on average, more than $23,000 through Frank. Charlie also claims that Frank is adding 2,000 families a day to its customer base. It seems like Charlie is finally hitting her stride as an entrepreneur and providing a real service to at least some real customers. But soon, a massive crisis will hand her a new opportunity to fulfill her promises, or exploit the very students she says she's trying to help. It's the spring of 2020 and Wesley Whistle is doing the same thing everyone else is doing,

looking at his computer. Wesley is a clean-cut 29-year-old with trendy glasses, blonde hair, and a beard. He works at the New America Think Tank as a senior advisor for higher education policy. And today, he's looking at Frank's website because he's trying to figure out if they're the real deal. In March, Congress passes the CARES Act, which allocated. billions of dollars in emergency aid to students. Frank quickly added a tool to their website to help students access CARES money.

Charlie has been doing interviews to get the word out, including one in Yahoo Finance, where she promises that Frank can help students secure $5,000 in grants. Wesley thinks this sounds too good to be true, so he tries to use the website himself. The first thing Wesley is prompted to do is identify why he's applying for aid.

he's applying for aid. He can pick from a few different options. Maybe he was fired or furloughed, is working fewer hours, or is just facing unexpected expenses. They all seem like good reasons to be applying, but none of them are actual eligibility requirements under the CARES Act. Wesley also notices that Frank leaves out important criteria, like the fact that students who are already online only before the pandemic are mostly ineligible. for aid. The deeper he goes, the less convinced Wesley becomes that Frank is helping anyone. The online form claims to be an application that lets students apply for aid through the site. But when he finishes filling it out, the tool just collects his info and sends him a templated

email letter he's supposed to send to his college. Because in reality, it's the individual universities that distribute CARES funds, not Frank. doesn't pass the smell test. So Wesley starts reaching out to university financial aid offices. He learns that each school has their own way to determine eligibility, so an email template like the one Frank offers may not even be useful. They also tell him that most of their grants are only for a few hundred dollars, which is way less than the $5,000 Charlie bragged about. worst of all, Wesley learns that most universities have already distributed the bulk of their cares money

despite Frank's claim that only 1% of the aid has been used. Okay, thank God for Wesley because he decided to make some calls. Also, I'm so curious how other people who are trying to access this money weren't like, wait a second, this isn't making any sense. Yeah, I guess they just thought they did something wrong because the system is built to be obtuse.

Yes, exactly. And now Frank is making it worse. Wesley thinks these applications are wasting vulnerable students' time and giving them false hope during a major crisis. He thinks the company is misrepresenting the CARES Act

in order to collect students' data. In July, he publishes a blog post summarizing his findings for the new America website. Sachi, can you read an excerpt? Yeah, he wrote, quote, capturing student data under the guise of helping them get pandemic relief money that's likely been spent already is bad enough. But doing so without actually helping them, well, that's the worst use of the never waste a crisis mentality.

Yeah, that's pretty gross. Thinking about this in the context of the pandemic too is like these are especially vulnerable students. Yes, and just remembering how everything was for people at that time, the sheer desperation, everyone had to be like, I can't be totally broke, I can't work, I can't do anything. People I know are dying. It's so insane. Yeah. Just a couple of weeks later, four members of Congress send a letter to the Federal Trade Commission urging them to investigate Frank, citing Wesley's findings.

And in response, the FTC sends Frank a stern warning four months later. Wesley has tried to call attention to Frank's questionable practices. But for now, Charlie can keep plugging away, and the very practices that got her in trouble are about to make her company look even more appealing to a new audience. Big Banks. It's July 2021, about a year after Wesley published his blog post, and Leslie Wims-Morris is about to get on an important Zoom call with Charlie.

Leslie is a 50-year-old woman with a smart Bob haircut and a professional, but trendy sense of style. She's the head of corporate development at J.P. Morgan Chase. Corporate development means that Leslie oversees acquisitions, and this is a very busy time for her. The U.S. stock market is booming,

interest rates are low, and J.P. Morgan, the world's biggest bank, is on what the financial times will later call a, quote, acquisition spree. They're hunting for companies that represent new customer bases J.P. Morgan wants to tap into,

and that's where Frank comes in. A few months earlier, one of Frank's investors sent an executive there some of the glowing press on Charlie. Now, Frank has made it clear that it's open to being acquired by a larger institution. And its target demographic, young people just starting to make major financial decisions, is very desirable to J.P. Morgan. So Leslie has been asked to meet with Charlie to see if she lives up to all the media hype. Leslie joins a Zoom chat from her fancy office at J.P. Morgan's Avenue headquarters. Charlie, who has moved to Miami Beach, joins from her apartment. Charlie launches into her pitch for Frank. She says the company has a user base of more than 4 million

and that she expects this number to balloon to 10 million by the end of the year. And she says they have personal contact information for a lot of students. Most importantly, Charlie assures Leslie that 70% of Frank's customers are in the 18 to 24 age range, the exact demographic Leslie has been told to target. There are some reasons to be skeptical of Charlie's pitch. She's suggesting Frank will grow to have a user base of 10 million students, which would be about 65% of all undergraduates enrolled in U.S. schools. Charlie also claims Frank works with more than 6,000 schools,

but there aren't even that many universities in the U.S. But Leslie later says that, like many investors, she found Charlie to be, quote, very knowledgeable, very articulate, and very engaging. Yeah, she would have to be, because she doesn't have anything real. Yeah, I mean, just goes to show how much having an awesome personality, like where it can take you, you know? I mean, that's why we're here, Haggy. True, very true.

But also, there's something else that likely moves the needle for J.P. Morgan. At some point, the bank learns that a competitor is making a play for Frank. If J.P. Morgan doesn't move fast, it could lose out on the potential to get millions of new customers. So Leslie schedules preliminary meetings between Charlie, Olivier, and a team at J.P. Morgan. And within two weeks, the bank puts in an offer to buy Frank for $175 million. That deal gives them an exclusive three-week window to complete due diligence and finalize acquisition. With the clock ticking, Leslie kicks off J.P. Morgan's due diligence efforts. It involves nearly 350 employees and is so big it has a nickname, Project Finland.

Leslie later testifies that J.P. Morgan's internal projections estimate that buying Frank could generate $500 million in revenue for the bank. At one point, Leslie forwards an investor letter from J.P. Morgan's CEO, Jamie Diamond, to her team. She's underlined some sections, including a line that said, sometimes, quote, there's no need to do analysis at all. Leslie later testifies that this was intended as a tongue-in-cheek joke to her team. I don't really understand what the punchline is. It sounds like she maybe meant it and then had to double back. Yeah, but I studied a law and she's actually protected under joke law.

So if you say it's a joke, then it's, yeah. Right, joke law, I forgot. It's just a joke. I forgot you were an expert on joke law. If it doesn't land, that's not her problem. And also, during this vetting process, Jamie Diamond himself meets with Charlie one-on-one for 30 minutes. Charlie's lawyers later say that he told her he thought J.P. Morgan should, quote, get the deal done.

So, Leslie and her colleagues at J.P. Morgan are motivated to make the Frank deal happen. The two questions that dominate the review are, does Frank actually have 4 million customer accounts? And what kind of contact information do they have for these users? Charlie confirms, yes, they do, and they have a mix of contact information like emails, phone numbers, mailing addresses, and other personal details. Leslie later testifies that she has 100% belief in Charlie's assertions. But not everyone shares her faith in Charlie. One person wonders how they can possibly verify Charlie's claims.

Another executive says she's worried Frank's customer data might be inaccurate. it. So, Leslie and her team ask Charlie for her list of users. At first, Charlie pushes back. She says it would be a violation of user privacy. After some back and forth, they find a compromise. Charlie will hand an encrypted version of the list to a third-party verification firm, which can check the data without violating user privacy.

Leslie's pleased. As long as the data checks out, she'll make sure J.P. Morgan acquires Frank. But Leslie is about to learn that when it comes to rising star founders, not everything is as it seems. Charlie is usually pretty cool and collected, but after Leslie asks for her customer list, she starts panicking. Remember how she told J.P. Morgan that Frank had four million users? That's technically true. Kind of. A few months ago, Charlie decided that anyone who visited Frank's website counted as a user, even if the company doesn't have any of their information. The real number of people who have actually signed up to use Frank is about 300,000, and they've

completed fewer than 150,000 FAFSA applications. It's not nothing, but it's probably not enough to keep J.P. Morgan on the hook. Charlie is in a tough spot. After years of exaggerating her success, a massive bank has basically called her bluff. If she wants the deal to close, she has to make it seem like she has data for 4 million people. So she and Olivier begin contacting firms to buy customer emails. Olivier finalizes a deal with a marketing firm to buy 4.5 million student data records

for more than $100,000. But only about 2.5 million of those records include email addresses. So Charlie decides she has one. one option left. Make the data up. She hits up Frank's head of engineering, a guy named Patrick. Patrick is handsome and French, and for a while he was trying to date Charlie. He sent her flowers, cards, photos, and made her playlists.

Charlie eventually had to have Frank's head of human resources put a stop to it. But now, she's turning to him and asking if he'll create millions of fake users. Patrick refuses. He doesn't want to do anything. New Eagle. According to Patrick, Charlie laughs off his concerns and tells him in French that she doesn't, quote, intend to end up in an orange jumpsuit, but he isn't convinced. There's a lot happening in this episode where people are just saying the thing that is going to happen. This sounds like fraud, very clearly. And I hope Patrick can hear that. Yeah, and it's also

awesome that everyone's data is just out there to buy and sell, you know? Yeah, I mean, I assume. we all knew that. Yeah, it's a great feature of our beautiful world. Super normal, feel safe. After being rejected by Patrick, Charlie turns to an old Wharton classmate, a guy named Adam. He was getting a PhD in statistics when they were at school together, and now he's a math professor in New York. Charlie texts Adam and asks if he can create the synthetic data. Adam later testifies that he was led to believe Frank really did have more than four million customers,

but that Charlie wanted to protect their personal information. That's a common use for synthetic data. And Charlie says she'll pay double his hourly rate. So Adam pulls an all-nighter. He takes Frank's actual user data and creates so-called look-alike data that would appear legitimate at first glance. He later testifies that he thought

whoever was using the data would know it's synthetic and that if they'd done due diligence like, say, calling a handful of the phone numbers, they would have figured it out pretty quickly. When Adam finishes the data set, he submits it to the third-party verification company, and they confirm, yes, the file contains more than 4 million records. Later, an executive from the third-party firm testifies

that they asked if J.P. Morgan wanted his company to do more thorough vetting, like verifying that the phone numbers were real. But J.P. Morgan declined. This is why people don't think the banks deserve to be. bailed out because they don't give a shit. What do you mean? You decline to verify. Basic stuff. This is the corporate version of when you and I are like, why didn't anybody Google anything? Yeah, it really is. I mean, the number is so high that there just should have been some phone calls,

enough phone calls to just be like, okay, well, there's a few hundred real people here, you know? Mm-hmm. Oh, it's so insane. And shortly after the database was verified, J.P. Morgan agrees to buy Frank for $175 million. Charlie will get $28 million, plus a $20 million bonus to stay on through the transition. Then she'll become a managing director at the bank with a $300,000 annual salary.

Olivier will get $7 million, a $3 million retention bonus, and he'll also become an employee of the bank. And for four months, Charlie is on top of the world. She's become a multi-millionaire founder just a few months shy of turning 30, but she isn't making the greatest first impression at her new job.

At some point, J.P. Morgan starts an internal investigation into allegations that Charlie misused company credit cards for personal expenses. Then, in January 2022, she gets an email from J.P. Morgan's marketing department. They want to launch a campaign targeting some of Frank's users and they need her customer list. the real one.

Charlie panics again because the list she used definitely won't stand up to scrutiny. Charlie has been backed into a corner, so she and Olivier tell their new colleagues that actually Frank only has one million marketable users. One million is a lot less than

4.5 million, but it's still way more than the number of users Frank actually has. And that same month, Charlie gets a scary reminder of what could happen if she gets caught when Elizabeth Holmes is found guilty in her fraud trial. When Charlie hears the news,

she texts Olivier that she hopes Elizabeth gets a light sentence. She says, the verdict is discrimination and that, quote, investors should be blamed. Um, discrimination against what? Hot bitches? What do you mean? Yeah, it's discrimination against women who have nothing.

Nothing going on. No real, tangible ideas that go anywhere. Right. Right, yeah, that's tough. With or without discrimination, Charlie is right to worry. A few months after handing over the list, she gets bad news from her bosses. The marketing department emailed Frank's user list, and out of the 440,000 emails they sent, only 28% reached a working inbox, and only 1.1% were opened.

Later, Charlie learns that only 10 people actually opened new bank accounts. J.P. Morgan calls the campaign disastrous. I think it's nice they can at least be honest about that. It's so crazy that like a marketing team just showed everything wasn't real. Brutal. Just embarrassing. I would close as a bank if I was caught doing this. Well, finally, the bank starts looking into Frank, including Charlie's old Frank emails, which contain a lot of incriminating evidence. She's cooked. In September, J.P. Morgan puts Charlie on administrative leave, and they fire her in November.

But even though Charlie is at her lowest, the girl bossing has only just begun. Remarkably, Charlie decides to go on the offensive by suing J.P. Morgan, saying the company launched the internal investigation as a pretext to fire her and avoid paying her $20 million bonus. Days later, J.P. Morgan files their own suit accusing Charlie and Olivier of inflating the numbers to make the deal happen. And this isn't just a conflict between Charlie and her former bosses. The deal has come to the attention of the federal prosecutors and the SEC. But to Charlie, it seems like being a founder means never having to admit that you failed.

And she's about to pull off an Uno Reverse so audacious and so costly that J.P. Morgan might come to regret not letting her take the money and run. It's January 2020, and Jamie Diamond is presenting J.P. Morgan's fourth quarter earnings to investors. Jamie is in his late 60s with white hair and downturned eyes. He's headed J.P. Morgan Chase since 2006, steering the bank through financial crises and a pandemic. But some investors calling in today are not exactly pleased, and they criticize Jamie for what they see as a bout of reckless spending, including buying Frank,

which ended up being like setting $175 million on fire. Jamie doesn't bother defending the purchase. He admits on the call that it was, quote, a huge mistake. But he says he can't get into the details yet because lawsuits are very much ongoing. Charlie is turning out to be a huge thorn in his side. That feels like a generous assessor.

of this woman who is launching them into an unforeseen legal snare. Yeah, yeah. I think if he could go back in time and change anything about human history, it would be never meeting Charlie. Yeah, I bet. At a minimum. Three months later, Charlie is arrested by federal agents at the Newark Airport. Charlie is charged with bank fraud, securities fraud,

why are fraud affecting a financial institution, and conspiracy to kill. bank and wire fraud, potentially adding up to decades in prison. And that's not even including separate charges from the SEC. The next month, Jamie's jaw probably drops when the court comes back with a ruling in Charlie's original lawsuit. It says that, under the terms of J.P. Morgan's merger deal with Frank, J.P. Morgan is responsible for paying all of Charlie and Olivier's legal expenses, even in the criminal case

against the bank. So Charlie pleads not guilty sending the case to trial. And she goes out and gets the fanciest lawyer money can buy. The guy who has represented Elon Musk, Eric Adams, and Tom Brady. He charges more than $2,000 an hour.

I think this is the most impressive part of the scam. To scam a bank and then have it written in the paperwork that they have to pay for your representation, Against them? Amazing. I'm putting this in every contract for the rest of my life. Yes. And also, I'm just kind of like, Charlie, you should have just done something else. You weren't meant to be a startup founder. You're meant to be some type of freaky strategist. Super villain? Let her run Palantir.

After more than a year of delays, the trial finally begins in Manhattan in February 2025. There's a line wrapped around the block to get into the courthouse, but it's because Diddy's trial is happening in the same building. Charlie sits in the courtroom as the prosecutors make their case. Charlie and Olivier promised J.P. Morgan too much and had to fabricate user data to seal the deal and cash out for millions of dollars. It's pretty cut and dry. Charlie's defense, on the other hand, makes a lot of interesting arguments.

They tried to make the case that J.P. Morgan rushed through its due diligence in a hurry to buy Frank before another bank could. Which might be true, but they're basically saying that if someone gets duped into a scam, the scam's no longer a crime. The judge in the case isn't buying it. And can you please read what he tells the court? Yeah, he said his job is, quote, punishing her conduct and not J.P. Morgan's stupidity.

Yeah, I mean, I guess that's right. But you would hope that you could also punish J.P. Morgan's stupidity. Yes, exactly. I mean, she's making a point, but also, also like you'd have to change the how everything works. Like how the judicial system works. If anyone can do it, it's Charlie. Yeah, I bet.

And Charlie's team also argues that J.P. Morgan regrets the deal because it was a business mistake. In July 2022, almost a year after the deal closed, the Department of Education implemented two-step verification for FAFSA applicants. Frank can't help with that since it's a third-party platform. So the usefulness of Frank as a company is basically completely undone. The trial goes on for six long weeks. It's headline news in the Wall Street Journal in Bloomberg,

and it's probably something Jamie has to answer annoying questions about at Davos cocktail parties. But in the end, no amount of media coverage, think pieces, or Twitter debates matter. Charlie's future will be decided by 12 people, her peers. By March 2025, Charlie's life is completely different. She's 32 years old now, and though she's still in the news all the time, it's a far cry from the fawning financial press she's used to. Charlie walks into the courtroom on March 28th, wearing a plain white button-down shirt and a pearl necklace.

Her family is gathered in the courtroom looking worried. She stands in court to hear the verdict and looks numb as she and Olivier are both found guilty on three counts of fraud and one count of conspiracy to commit fraud. A few days later, Charlie is back in court with a special request. Her court-ordered ankle monitor

is making it hard for her to work while she's being sentenced. See, she has a new job, teaching Pilates in South Florida. One of her supervisors testifies about how dynamic Charlie's Pilates classes are and her lawyers even display photos of her exercising as official court exhibits.

The U.S. attorney says her desire to teach Pilates doesn't override the fact that she is an obvious flight risk. You know, Teresa Jujice did yoga in Pilates in prison every day, and she came up pretty jacked. And as the girls know, the girls who love Pilates, like yours truly, Joseph Pilates created that in prison. I know. So, you know, she's kind of close to the true essence of Pilates if you think about it.

For months, Charlie waits to be sentenced, wearing her ankle monitor. More than 100 people write letters of support, including investors and J.P. Morgan colleagues. They all argue that Charlie is a good person who just made a mistake. Charlie sends her own letter to the judge saying that she made mistakes because she was young in that this whole ordeal has delayed her dream of becoming a mom. She also invokes her Holocaust survivor grandmother's commitment to education, and she says she's afraid of her mother's health as she approaches the age when both her grandmother and great-grandmother were diagnosed with cancer.

A few weeks later, on September 29th, Charlie is brought back into the courtroom to receive her sentence. She asks her parents for forgiveness and dries her eyes with her. the tissue. The judge tells her, she's a good person who did a bad thing, but she still needs to be punished. Charlie is sentenced to seven years in prison. About a month later, Olivier is sentenced to just under six years. There's no doubt that it's a tough pill for Charlie to swallow. However, there is a silver lining. The judge allows Charlie to be free on bail while she appeals her case, and she's definitely going to, because Jane's... JP Morgan is still picking up the tab.

And Charlie's legal fees to this point have reached more than $60 million. The bank is on the hook for Olivier's bill too, which is more than $55 million. To put that into perspective, Sachi, Elizabeth Holmes spent a comparatively modest $30 million defending herself in the Theranos trial. I think what is so amazing about this is that they've actually managed to make J.P. Morgan pay twice. So once in terms of the actual deal and then the amount of money that they spent on legal fees, it's almost as much as they got in the actual deal. It's kind of genius. I know. I mean, listen, of course I have a lot to say about how this ends up,

but maybe Charlie's a bit of a leftist icon. Yeah, I mean, she is eating the rich, single-handedly. Well, technically, the judge included those legal fees in the restitution, Charlie will have to pay back as part of her sentence. But in practice, Charlie will pay the bank 10% of one. what she earns for the 20 years after she gets out of prison. And even a very well-paid Pilates instructor is not going to earn enough to pay that back. A month after Charlie is sentenced, J.P. Morgan files court documents accusing Charlie and

Olivier of clear abuse in running up, quote, unprecedented and shocking legal costs, treating J.P. Morgan as a, quote, blank check. And it is true that, throughout the course of her defense, 19 different lawyers appeared in court to defend Charlie. At some point, she moved on from Elon's lawyer and hired two guys best known for defending Harvey Weinstein. And now that she's going for an appeal, Charlie's hired a woman who previously defended Sam Bankman-Fried.

But Charlie's team counters that J.P. Morgan itself used more than 50 lawyers at six law firms in its defense. As of this recording, J.P. Morgan estimates it's on the hook for $73 million in legal costs for its former employee, and the appeal hasn't even started. You know, Sachi, this is a story I truly wasn't familiar with in any way. Like, I had no idea this woman existed. And I really did think at first it was going to be typical kind of startup trash,

but she really put that thing down, flipped it, and reversed it. I don't think we've ever had a case where somebody got, the other party to pay for their legal defense, and they lost. Yeah, I don't know what she expected to happen because she just never had anything she said she did. Nothing that she created did what she said it was doing in a way. And I wonder if she knew that, like, J.P. Morgan was never really going to look at it and if she kind of had some type of foresight here, or if she really was kind of like, you know what,

let's see what happens. Yeah, I've never been able to fully understand what people are thinking when they're pulling scams like this that require like so many lies and long-term lies and like also hopes for the future that no one is going to look or that they will look and it won't be your fault. I don't know, but the numbers are so beyond my comprehension. I bet she just like was never thinking about the scale of it. Like she had her company purchased for $175 million. That is so much money for a very young person to get. And then she's billing their lawyers $73 million for her defense. Like, these are not numbers that exist in reality.

This is not a person in reality with us. Another aspect here in the story is, which like really was pissing me off at first, was just like highlighting the whole startup mentality where they're all like, we can get so rich fixing the world's problems. And it won't involve giving anyone anything for real. It's this disgusting lordship idea that's all ingrained in their minds where they're like, I know it's best and it's actually not to give poor people money and opportunities. It's to make them work for it in a way that I'm designing.

I think there are a lot of people who believe maybe seriously that their humanity-saving initiatives will make everybody a lot of money, and that's not true. Yes, you're just kind of like, what? Like, none of this should have happened at all. She was so smart because, again, they could have just, if they let her go and never went through any of this, they would have saved so much money. I know. Their mistake. And clearly they don't care about justice, but, like, you know, no one would have known about it.

Yeah. She almost got away with it. She should have run sooner. I agree. I mean, I really want to know what she thinks of it all now. We see Elizabeth Holmes in prison. She's, you know, creating her little comeback. snowballing for her release, you know, and I wonder what Charlie's going to do. I need to know what

she's going to do because this is not the last we will see of her. I'm confident she's going to get some sort of early release and she is going to be on an Andy Cohen produced show and I will watch it. I think she might be smart enough to know that like attention isn't a good thing for her. I think it's going to be like a legal show. Like it's going to be her offering legal advice to people and the advice is just get the other party to pay for your legal fees. It's a great show. Yeah, I mean, she invented something as impressive as double jeopardy to me. So I'm floored.

Anyway, I also feel like, say this company did do what she said it was doing, would it even be worth that much? No, I don't know who the victim of this scam was because she didn't have real data. She didn't really do any true privacy breach. Her employees seem to like her all things. considered. And she ripped off a bank? Yeah. I think the scam goes to the very basics of what she was offering, which is people's email addresses. It was $175 million for email. I mean, even if it was

a real business, it was still bullshit. For that many millions of dollars, I could have gotten all that data. Yeah. I would have personally gone door to door until my shoes were worn down, collecting data. For $175 million, I'll canvas. I'll get some emails. I'll get a team. I'll hire a team, and we will get the data. I'll open a store that asks for emails.

Yeah, people will give it to you. I'll get that data. This is Charlie Javis. Bake it till you break it. I'm Sarah Haggy. And I'm Sachi Cole. If you have a tip for us on a story that you think we should cover, please email us at scam influencers at Wendry.com.

We use many sources in our research. A few that were particularly helpful were she's accused of duping J.P. Morgan. Somehow, the bank is feeling the heat. By Alexander Saidi in the Wall Street Journal. How Charlie Javis got J.P. Morgan to pay $175 million for... What, exactly? By Ron Lieber in the New York Times. The unauthorized profile of Charlie Javis, the millennial founder convicted of swindling J.P. Morgan

to the tune of $175 million, by Louisa Beltran in Fortune, and reporting by Airmail and The Daily Beast. Jessica Ford wrote this episode. Additional writing by us, Satchie Cole and Sarah Haggy. Eric Thurm is our story editor, backchecking by Kalina Newman, sound designed by James Morgan. Additional audio assistance provided by Augustine Lim. Our music supervisor is Scott Velasquez for Frieson Sink.

Our managing producer is Desi Blaylock. Gene Cornelow and Stephanie Jens are our development producers. Our associate producer is Charlotte Miller. Our senior producers are Sarah Eni and Ginny Bloom. Our executive producers are Jenny Lauer Beckman and Marshall Louie for Wondery.