JPMorgan said Frank founder Charlie Javice transferred millions of dollars to a shell company after the bank discovered it had been defrauded in acquiring her college financial planning site. The U.S. bank is suing Javice for fraud and asked a judge for permission to question her under oath and seek evidence about the transfers to Chariot Holdings X LLC, a Nevada company she set up in September 2022. Javice is also sued by the SEC and charged by U.S. prosecutors.

The bank said in a court filing that the transfers took place shortly after JPMorgan discovered Javice’s fraud and that the corporation to which she transferred the money is in a state — Nevada — often used by individuals who want to hide their ownership information, the report said.

Allegedly, Charlie Javice duped JPMorgan into thinking Frank had access to data on 4.25 million students who used its service, though the true number was below 300,000. Javice has denied JPMorgan’s claims of fraud, is countersuing the bank, and has said that the bank launched its internal investigation as a pretext to prevent her from getting a $20 million retention bonus, per the report.

JPMorgan brought the lawsuit in January, saying that it was defrauded when it bought Frank, the college financial planning platform founded by Javice, because Javice and another Frank executive, Olivier Amar, inflated the number of customers who were using the platform.

Lawyers for Javice said in response to the lawsuit that JPMorgan didn’t perform due diligence, rushed into the deal, and launched its internal investigation of the deal to fire her and deny her a retention bonus. The Office of the Comptroller of the Currency (OCC) is looking into JPMorgan’s due diligence on recent acquisitions, including Frank.

The U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) charged Javice with fraud. She was arrested in early April 2023 and was later released on a $2 million bond.

The U.S. Securities and Exchange Commission (SEC) charged Charlie Javice with fraud in connection with the sale of Frank.