Frank’s founder sued, alleging he paid a college professor $18,000 to help fabricate accounts for sale to JP Morgan

A fintech startup that JP Morgan Chase bought for millions may be built on a layer of lies, according to a new lawsuit filed by JP Morgan. And if the investment bank is to be believed, an $18,000 check to a data science professor in the New York City area went wrong.

On December 22, JP Morgan filed a lawsuit against Charlie Javis, the millennial founder of Frank’s student aid facilitation platform, and the company’s chief growth officer Olivier Amar, alleging that the pair fabricated about 4 million non-existent accounts they said used their service, which was bought by JP Morgan for $175 million in September 2021.

Investment Bank close Frank on Thursday, weeks after the lawsuit was first filed. In its lawsuit, the bank asserts that while it expected to purchase a company “heavily involved with the college-age market segment” with more than 4 million users, what it actually received was a list of customers with “no more than 300,000” accounts.

Alex Spiro, Javis’ legal representative, did not respond luckHe requested comment, but denied the allegations against her other news outlets. Javis sued JPMorgan in December alleging that the bank used an investigation into Frank as a pretext to fire her from her job at the company, Bloomberg reported. Spiro told the outlet that the bank’s lawsuit “is nothing but a cover-up.” luck Unable to access representation for Amar.

JPMorgan alleges that in 2021, when the bank and Javis first discussed the acquisition, Frank had “fewer than 4 million confirmed customer accounts” to the bank. To make up for the shortfall before Frank’s official customer account data was submitted to JP Morgan for due diligence, the bank claims that Javice and Amar first turned to an unnamed platform engineering manager to create “synthetic data”—false information about customers generated by computer algorithms.

According to JP Morgan’s lawsuit, the engineer felt uncomfortable, asked “whether the request was legal” and eventually refused, so Javice and Amar allegedly turned to an outside source, referred to only as a “Professor of Data Science at the City District College of New York” in the lawsuit.

The professor allegedly agreed, according to the suit, and was willing to offer “creative solutions” to Javis and Amar’s data problems. What followed, according to the lawsuit, was an unusual series of emails exchanged.

“Should I try to make them up?”

The data science professor was tasked with creating data on approximately 4.3 million customers for Frank, including names, emails and birthdays, according to the JP Morgan lawsuit, and it was allegedly made clear from the start that the professor and Javis were fully aware of this. The information will be fake.

When drafting the names of the new clients, the professor allegedly emailed Javice with a proposed template to weed out real people’s names by independently testing first and last names, “to ensure none of the names sampled were correct”.

In another email, the professor allegedly noted how many of the accounts’ personal information records were identical, including an abnormal frequency of high school and city names. Such a list ‘may look fishy [him] if [he] It was for his audit,” the professor wrote. When it came to creating phone numbers, Javis allegedly told the professor that some duplicate numbers between accounts were acceptable, as long as there were no more than “5%-7%” copies, according to the suit.

Physical addresses have proven to be one of the biggest sticking points due to the complexity of creating unique addresses, according to the lawsuit, with the professor allegedly telling Javis at one point that they “waste a lot of time on address addressing.” Early in the process, the professor allegedly told Javis that he was having trouble finding believable titles. “Should I try to make them up?” he asked, and Javis replied, “I just don’t want the street not to be in the state.”

Because of his troubles, the data science professor sent Javis a bill for $13,300, according to the JP Morgan lawsuit. But his work summary allegedly proved problematic, as the professor allegedly wrote individual items for each fake information field he helped create. Javis “immediately” asked the professor to return the bill with a single line that read “data analysis,” promised him a larger reward and raised the bill to $18,000, according to the lawsuit, and alleged that the professor complied with the request.

said Pablo Rodriguez, a spokesman for JPMorgan luck It is to settle the differences between the bank and Javis in court.

“Our legal claims against Ms. Javis and Mr. Amar are set out in our complaint, along with the main facts. Any dispute will be resolved through the legal process,” he said.

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