Olivier Amar, a former executive at the educational assistance startup Frank, has been indicted and charged with involvement in defrauding JPMorgan Chase. Court documents reveal that Amar, who served as the company's chief growth officer, is facing federal counts of wire fraud, bank fraud, securities fraud, and conspiracy. These charges have been added to the existing case against Frank's founder, Charlie Javice.
Amar, aged 49, became the second employee of Frank to be charged in this case. On Thursday, he pleaded not guilty and was released on a $1 million bond. Javice, 31, was arrested earlier this year and faced the same charges of fraud. Like Amar, she pleaded not guilty and was also released on bond.
The Securities and Exchange Commission has included Amar as a defendant in its civil suit against Javice, which also alleges fraudulent activities.
Despite requests for comment, the attorneys representing Javice and Amar did not provide a response to NBC reporters.
According to the complaint filed by the SEC, Javice and Amar hired a data scientist to create a fictitious list of users, which was presented as evidence to JPMorgan to support Frank's user data. The fabricated list indicated that the company had 4.25 million student customers, an exaggeration of over 10 times - in reality, it had fewer than 300,000 users.
Damningly, Javice sent a WhatsApp message to Amar in 2021, expressing her satisfaction with finding a skilled individual who could assist in this fraudulent scheme. Amar responded positively to the message.
The data scientist was paid $18,000 for his services, as revealed in the complaint.
The defendants also compiled a list of actual names that were used to falsely represent Frank customers. Amar organized a payment of $105,000 to a third-party data compiler for college student data as a backup in case the fabricated user list was not provided by the data scientist.
The alleged scheme was uncovered when JPMorgan conducted an email marketing campaign targeting the supposed Frank customers, but received very few responses, according to the SEC complaint. JP Morgan claim that more than 70% of the emails they sent bounced back.
JPMorgan had touted the deal at the time as giving it the “fastest-growing college financial planning platform” used by more than 5 million students at 6,000 institutions.
Javice founded Frank in 2017, and JPMorgan Chase acquired the company in 2021 as part of a "buying spree" of fintech companies. As part of the acquisition, Javice and Amar were also hired by the bank.
In January, JPMorgan closed down Frank due to the fraudulent activities.
Prosecutors revealed that Javice received over $21 million for selling her equity stake in Frank to the bank, along with an additional $20 million as a retention bonus. Amar received $5 million from the merger and a $3 million retention bonus as per his employment agreement, as stated in the SEC complaint.
Last year, JPMorgan filed a lawsuit against Javice and Amar in federal court in Delaware, accusing them of fraud and misrepresentation regarding the size of Frank.
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