Vụ lừa đảo JP Morgan: Nữ sáng lập 31 tuổi tạo 4 triệu khách hàng ảo bằng khoa học dữ liệu

foreign [Music] hi welcome to another episode of Cold Fusion new people dream about success from a young age we see the covers of magazines featuring young entrepreneurs those who thought different defied the status quo and decided to embark on a journey that led them to massive wealth and success we all know these stories but sometimes when someone tries to achieve success by any means necessary it can go very wrong such is the story of Charlie Javis on the surface everything seemed Flawless millions of dollars in funding from JP Morgan a spot on the prestigious Forbes 30 under 30 list and support from industry Titans like a polo CEO Mark Rowan but lurking behind this polished facade was a network of lies to seat and flagrant exaggerations for a decade Charlie carefully crafted an image that deflected nearly all controversies but as we've seen previously on this channel her precious House of Cards eventually Came Crashing Down could be facing up to 100 years in prison accused of defrauding JP Morgan Chase out of millions Charlie Javis she was a hot shot in the startup World student scam students but scammed the bank so who was she and how did she manage to fool and defraud one of the biggest banks in the world is the story of Charlie Javis [Music] Charlie's entrepreneurial aspirations seems to have taken root in her teenage years she grew up in an affluent New York family attending a well-known french-american private school in New York the idea for her first Venture came while she was still in high school in a story strangely mirroring Elizabeth Holmes she got her first idea after a trip overseas for Charlie Javas the destination was Thailand and when she returned she had the idea to start a microfinance product during her visit she recognized that people in developing nations lacked access to credit her solution was to have a service that offered small low interest and secure loans to those who are underprivileged the result was her non-profit called pover up it worked as an online platform that used microfinance for social good to quote and poverty with the click of a mouse it would work by harnessing small student contributions to make loans possible but as we'll later see even in this all was not as it seems After High School Charlie pursued a finance and law undergraduate degree at Wharton her Venture made headlines Landing her a feature in ink magazine they called her idea one of the coolest College startups around the same time fast company listed her as one of 100 of the most creative people this was the first time she was able to create media attention as it would turn out this would be the most important skill that she had the recognition caught the eye of the Peter Thiel Foundation they were offering students one hundred thousand dollars to leave college and chase their entrepreneurial dreams however according to a cover-up tumbler post Charlie withdrew from the competition choosing to stay in school despite missing out on a hundred thousand dollars the scholarship bid earned her significant media attention way more than before following graduation Javas began exploring New Market gaps that required addressing following several business plan revisions she finally discovered the free application for federal student aid or FAFSA and this is what it is each year the federal student aid office distributes over 249 billion dollars in federal aid to 13 million students the thing is there's a major issue with it the application process is notoriously difficult causing students to leave billions of dollars unclaimed each year determined to assist students she devised a solution that could simplify the whole process to an application of just five minutes or less it's totally free that's really important to us for all students to benefit from so a student takes a picture of their tax returns then we do all the tax math for you so no math errors that can put you into very complicated verification very simple language we take a flow that might take hours with the federal government and most students take four minutes with us so that's more or less how it works you see how much you're eligible for then you can go to school feel confident see what your bill is and then figure out the Gap to help you this was the core idea of what she would call Frank as she described quote Frank kind of represented that as a name because it just meant honest using her status and connections that she'd gained from meter exposure she was easily able to find financing for her project in just a few years Frank had raised more than 20 million dollars in funding and accumulated over 300 000 users on paper the company looked like a massive success with Javis seizing every opportunity to promote herself as an up-and-coming star of the business world she reflected her thoughts to Insider in 2021 quote I built a business and raised funds out of college turning down a finance job even though I was told I would fail because I didn't have business experience but soon major red flags began to appear in 2017 the Department of Education issued a cease and assist letter the reason Frank may be misleading students into thinking that it's associated with the government's official website following the incident the company changed its marketing to clarify that it had no affiliation with the US government but this was just the beginning of the problems in December of 2017 Javas wrote an opinion piece for the New York Times it was supposed to be on quote the eight most confusing things about FAFSA the thing was the article later had to include a significant correction stating that there were multiple inaccuracies about the aid process now just think to yourself how was the CEO of a company that specializes in this exact field able to get so many things wrong it's not a good look the general public didn't pay much attention though because Javas was on a media tour she frequently appeared on articles and podcasts so much so that it culminated in her inclusion on the Forbes prestigious 30 under 30 list in 2019 [Music] by 2021 Javas had begun exploring the possibility of selling her Venture by the start of summer the now famous startup founder was able to secure a meeting with JP Morgan eager to expand their presence in the rapidly growing niche of Student Financial products JP Morgan saw Charlie javis's Company Frank as a great way to increase market share and secure talent to help them grow in that sector during the meetings Javas held nothing back and she pitched her company as quote an acquisition machine amassing over 4.5 million customers in just four years she also claimed that her company knew quote more about their students than any lender college or employer the pitch was a success after a few meetings she managed to convince JP Morgan to purchase her company for 175 million dollars it was an amazing Payday for Charlie though there was one thing remaining the bank had to do due diligence and one of the first items on JP Morgan's due diligence list to verify those 4.25 million customers that Charlie said she had amassed at this point it's important to remember that the bulk of the company's price had to do with the quality of their customer base the higher the number the higher the price tag that JP Morgan would be willing to pay something peculiar happened Charlie refused to provide the list she said privacy concerns but there was another reason for this she was hiding something the fact was in reality there weren't 4 million users but fewer than three hundred thousand [Music] when July 2021 arrived Charlie needed to present the data for the deal to proceed she was at a Crossroads now should she disclose the actual figures and risk losing a very profitable deal or fabricate the numbers to guarantee the acquisition you see Charlie was worried because before JP Morgan there was another bidder for the company but after they saw the real numbers they withdrew the negotiations fearing the loss of another potential buyer she opted to falsify the data hoping she could pull it off according to legal documents quote Javas chose each time to lie and time and again she layered fraud upon fraud to deceive JP Morgan Javas needed to figure something out and quickly how was she going to get a customer database with more than 4 million customer emails this is where her Chief growth officer Olivia Amar comes into the picture initially Amar approached the company's top engineer to create the fake account but the engineer smelt a rat and he questioned the legality of the request Javas assured him that quote no one will end up in an orange jumpsuit but the engineer knew better and he ultimately refused having no other option Charlie had a backup she knew a guy a professor in New York who specialized in quote Creative Solutions for data problems she would reach out to him for help with the professor's assistants they were able to create over 4 million fake accounts by using an algorithm the algorithm created new fake customer information based on real profiles after some tinkering they scrape together a list they held their breath and sent it off to JP Morgan surprisingly or unsurprisingly the banking giant bought it as a thank you Javas paid the professor eighteen thousand dollars for his efforts and now they just had to wait for their payday but before that they needed to cover their tracks Charlie ordered the destruction of the fake customer list within minutes of a third party completing their analysis Amar spent an additional 105 000 acquiring a separate data set of 4.5 million students this was a contingency plan just in case the other data set failed once the deal closed Javas received 10 million dollars in compensation and was eligible for an additional 20 million retention bonus as a managing director at JP Morgan Amar became an executive director and received 5 million as well as a 3 million retention bonus around that time Charlie went on to social media to boast that quote it's not every day that an entrepreneur gets her fairy tale new beginning not ending however this illusion of Glory ended almost as quickly as it began a couple of months later JP Morgan was busy integrating Charlie's company and team into their operations they wanted to start utilizing that fast customer base that they acquired in the process the dispatched advertisement emails to 400 000 Franc customers and here it was immediately clear that something was horribly wrong a mere 20 of emails were even delivered and an even more minuscule one percent were opened investigating deeper JP Morgan discovered the email exchange with the corrupt University professor and they were seeing red both Amar and Javis would be suspended from their JP Morgan roles and in December of 2022 JP Morgan filed charges against them Javas had the goal to retaliate and counter Sue she argued that her termination was not just you know what else isn't just faking your entire business unfortunately for her the court found the evidence against her to be compelling and in April 2023 she was found guilty on four separate counts of having quote falsely and dramatically inflated Frank's customer numbers and quote fraudulently induced JP Morgan to acquire her company [Music] uh now to a high profile fraud case that's uh literally happening in front of us in real time the 31 year old accused of quote falsely and dramatically inflating the number of customers that the company had in the scheme to fraudulently induce JP Morgan to acquire the startup in 2021 she stood to gain more than 45 million dollars from the alleged deception in January JPMorgan CEO Jamie dimon called the acquisition of Frank a quote huge mistake there's a lot of people around a transaction of these of this size and not to have any idea that the numbers uh aren't exactly what uh is being said kind of go back to FTS you know it's just shocking that she thought she could just get away with faking the numbers and lying taking home the pay packet and expecting JP Morgan just to not look deeper if we dig deeper into Charlie's history we begin to see the real picture and it's a real doozy as it turns out her squeaky clean image was just an illusion as a person familiar with her would later remark quote this is exactly what she had been doing what she had been doing all along and now she has gotten caught for it tracing things back to her college Years remember her first Venture cover up the micro lending platform for developing countries well it was never officially registered as any type of company there are no records of its existence and this is despite her bold claims of customers and partnership deals some of those Partners have even come out and said no we don't know who this person is we've never done a deal with povera or Charlie Javas despite telling Wharton magazine in 2013 that pover-up raised three hundred thousand dollars from friends or family a former board member confirmed it didn't distribute a single loan and remember the Peter Thiel scholarship that she supposedly turned down well Michael Gibson who oversaw the grants stated in a Forbes article quote she was never offered a fellowship and it bothers me that she is going around saying that because of her personality we didn't trust that she could get started in a real way reportedly her team cheated during a scavenger hunt challenge for the scholarship trials Gibson commented quote the funny thing is cheating in a scavenger hunt is a pretty small thing but it's weird now she's being accused of something on a much greater grander scale it's almost like too much on the nose he also recalled that one reason for her rejection from the program was that she presented her Venture as ongoing when in reality there was nothing to show for it of course as was seen already despite all these disasters she would move on to her next project Frank and secure 10 million dollars in funding but this company was also a mess initially it was a job search website that connected young workers with job opportunities via text message then it was a credit score website and finally it helps students with Aid programs according to insiders it was a very Rocky start allegedly the Venture ran out of money leading Javas to stop paying her employees and refused to provide promised Equity bonuses this led to a lawsuit but this disaster didn't matter because Javas was a marketing genius she could rewrite her own narrative when she would retell the story she omitted the lawsuit she said the layoffs were the most difficult time in her life so we know that Javis does seem to manipulate and lie but by the time she launched Frank she'd gone Bonkers a person present at the first investor meeting said that Javis promoted the product by claiming that they had thousands of sign ups when they had none quote we'd all start looking at each other like this is insanity you can't be saying these things some of the things that were being said were just inexcusably inaccurate when those same people ended up confronting her about it Javas would State quote listen these old people don't understand this is how it works you fake it till you make it in one of her appearances on a podcast she stated that quote being a Founder I'm obviously skewed towards being overly optimistic and sometimes that works to your advantage sometimes it doesn't and there were definitely times where I painted a Rosier picture than things truly were regarding the internal atmosphere of the company from her previous mismanagement experiences testimonies from employees painted a picture of misery with management solely focusing on user-based growth and neglecting all other concerns as it stands Charlie javis's story emerges as yet another cautionary tale drawing parallels with the cases of Elizabeth Holmes and Sam Beckman freed in each of these three scenarios their marketing prowess significantly outshone their actual management abilities Javas was marketed as a genius she lied and faked her way to the top but bit off more than she could chew when she tried to scam J.P Morgan and it came back to bite her in a big way this is also a vivid reminder of how the fake it till you make it mentality can backfire and rapidly on a wider macro scale this kind of tells us something as well usually during boom times and prosperous times unethical Behavior can easily be overlooked Tech investors are eagerly jumping on every opportunity because if they don't they're going to miss out on the next big thing but when the economic tide turns and sober reality returns many are left stranded and this is precisely the current sentiment the Forbes 30 under 30 list has been widely ridiculed for showcasing some of the Decades most notorious fraudsters on its magazine covers however the selections themselves may not be the issue as you know if you've watched my videos since 2008 until very recently we have been living in a fake macroeconomic environment supported by low interest rates and easy money now add social media into the mix where reality and fiction blur and you have a recipe for individuals that want to take advantage of the times and craft narratives for their own fake success so that is the story of Charlie Javas the woman who flew too close to the sun which was JP Morgan for me scammers and fraudsters have always been out there but there's something about the millennial generation that just seems to be on a grander scale and much more Brazen if you've got any thoughts on why I'd be interested to hear that's just my opinion though and I'm a millennial myself so I'm not throwing any shade all right so thanks for watching hope you did enjoy that if you did feel free to look around on the channel there's plenty of interesting stuff on here on science technology and business my name is Togo and you've been watching cold fusion and I'll catch you again soon for the next episode cheers guys have a good one [Music] stop trying [Music] it's me thinking