A Big Mistake: How Fake Numbers Fooled a Giant Bank

A former executive has been sentenced to over five years in prison for his role in a scheme that tricked JPMorgan Chase into buying a startup for a huge amount of money.

Key Details

• Olivier Amar, the former chief growth officer for Frank, was sentenced to 68 months behind bars.
• Charlie Javice, the founder of Frank, was sentenced to 85 months in prison earlier.

The Scheme

Frank, a company aimed at simplifying college financial aid, was up for sale. To inflate the company's value:

• Javice and Amar created a fake list of customers.
• They used real names bought from data brokers to make it seem like Frank had millions of users.
• In reality, Frank only had around 300,000 users.

Charges and Sentencing

Both were found guilty of:

• Bank fraud
• Securities fraud
• Wire fraud

• Conspiracy to defraud

• Prosecutors argued Amar deserved at least six years in prison.
• Amar's lawyers claimed he didn't come up with the scheme and asked for no prison time.

Aftermath

• Amar, who is from Montreal, is likely to be deported after his sentence.
• JPMorgan's CEO Jamie Dimon called the purchase of Frank a "huge mistake."

Lessons Learned

This case raises serious questions about due diligence in big business deals. How did a major bank like JPMorgan fall for such a scam? It's a stark reminder that even the biggest companies can be fooled by fake numbers and clever schemes.