Shulou(Shulou.com)11/24 Report--

The American financial giant JPMorgan Chase, which is popular on Wall Street, was easily defrauded of nearly 200 million US dollars by a little girl.

The financial giant has been tricked into being the largest banking giant in the United States and the most valuable bank in the world, with assets of more than $3.6 trillion (currently about 24.77 trillion yuan) and more than 240000 employees. However, the significance of JPMorgan, which is based in New York City, to the United States cannot be measured by numbers at all.

(JPMorgan Chase is the cornerstone of the US financial sector.) JPMorgan Chase is not only the cornerstone of the US financial sector and the most Too Big To Fail bank, but also the designated partner of the US government, specializing in helping the government clean up the mess during the financial crisis. After the outbreak of the subprime crisis in 2008, JPMorgan Chase acquired the bankrupt Washinton Mutual and Bear Stearns under the direct arrangement of the federal government, which prevented the US financial industry from falling into a complete collapse.

However, today's young people are so bold that even JPMorgan Chase, which is one-handed in American politics and business, dares to cheat, and the fraud is so simple and low-level. Perhaps the professional M & A team of JPMorgan Chase saw this pure and sunny face and could not help but relax their vigilance and failed to maintain strict professional auditing standards.

Charlie Charlie Javice, 31, was arrested last week while boarding a plane at Newark Airport near New York and was formally charged by the U.S. Department of Justice. She faces several federal charges of telecom fraud, financial fraud, conspiracy fraud and securities fraud. If convicted, the maximum sentence for each charge is 30 years. Although she will not be sentenced to a hundred years in prison, a long prison sentence is inevitable. In addition, Jarvis faces a civil lawsuit against securities fraud filed by the Securities and Exchange Commission (SEC).

(seemingly sweet fraudster) US attorney Williams in Manhattan said Jarvis was suspected of fraudulently misrepresenting the number of users and deceiving JPMorgan into buying his own company. "she lied directly to JPMorgan and falsified data in order to sell the company to JPMorgan and get more than $45 million (currently about 310 million yuan)."

A federal judge in Manhattan subsequently set bail of $2 million (currently about 13.76 million yuan) for Jarvis. However, the amount was not a big deal for her, and she used her Miami property as collateral to pay bail and returned to Florida to wait for trial.

As a condition of being released on bail, Jarvis was forced to surrender her US and French passports (she is of dual nationality), only allowed to travel between Miami and New York, no travel at night, and no access to witnesses related to the case. including employees of JPMorgan Chase and her own company.

Perhaps Jarvis will regret defrauding JPMorgan for the rest of his life. Just a year and a half ago, she was considered one of the most successful young entrepreneurs in the United States, with nearly $50 million in assets before the age of 30.

The fairy tale of entrepreneurial success Vanity and greed ruined Jarvis's flowery life. The sweet-looking girl was born in New York and is a wealthy second generation on Wall Street. She spent her time in an elite private school in New York from kindergarten to high school and graduated from the Wharton School of Business at the University of Pennsylvania.

Because her father works in a hedge fund, Jarvis knows a lot about the operation of the financial industry on Wall Street from an early age, and her own brother is the chief data officer at another American restaurant giant. She knows all too well how to use data to deal with the financial industry.

In 2016, the 24-year-old Jarvis launched Frank, a student loan application tool, as CEO, which was officially launched in 2017 to help students and their parents select and apply for college grants and student loans. Jarvis calls the site "Amazon of student loans", which means one-stop financial services for students, just like picking products.

Some personal integrity problems of entrepreneurs will emerge in many details, but they are always easy to be ignored. Frank was faced with controversy at the beginning of its establishment and became the object of attention of the US government. In 2018, the U.S. Department of Education accused Jarvis of using misleading descriptions to make users think that Frank, a financial aid platform, was related to the Department of Education. The two sides finally reached a settlement, and Frank revised a number of website descriptions to clarify that he had nothing to do with the Department of Education.

In 2019, the 27-year-old Jarvis appeared in Forbes magazine and was listed on the "30 Under 30" list (30 young entrepreneurs under the age of 30) and is considered the most anticipated young entrepreneur and future business leader in the United States.

In 2021, JPMorgan Chase, which plans to expand its student loan business, targeted Frank as an acquisition target. Throughout the negotiations, Jarvis has said that his Frank platform already has 4.3 million users. This huge target user base is the main reason to attract JPMorgan Chase acquisition.

By convention, JPMorgan's M & A team must conduct due diligence and ask Jarvis to provide proof of the company's condition. Jarvis then provided JPMorgan with a list of user data including specific identity and address contact information to prove himself. Perhaps it was a dereliction of duty on the part of the JPMorgan M & A team, who did not carefully validate the user data and eventually agreed to buy Frank for $175 million based on a size of 4.5 million users.

With the acquisition, Jarvis, just 29, reached the peak of his life, worth more than $45 million (currently about 310 million yuan). She cashed out $21 million of her Frank stake and received a retention bonus of more than $20 million at JPMorgan. With the merger of Frank into JPMorgan's Chase, Jarvis became managing director of student financial products.

On the day the deal was announced, Jarvis wrote on LinkedIn, "not every day, entrepreneurs have a new beginning like a fairy tale, but this is not the end."

(her profile shows off success) unscrupulous fraud, however, Jarvis's successful entrepreneur is set up by lies and deceit. Shortly after the acquisition of Frank, JPMorgan sent marketing emails to users about the deal and new business products. But the vast majority of their emails were returned. Even if the message was sent successfully, only 1% said it had been read.

JPMorgan's management team discovered that something was wrong and conducted a new investigation into the state of Frank's business, which surprised them. Frank, which claims to have 4.5 million users, has only more than 200,000 real users. Jarvis invented the data of 4 million users.

After the JPMorgan M & A team asked Jarvis to provide proof of user data, Jarvis initially instructed Frank's engineering director to fabricate user data and tried to reassure him, "it's not a big deal and we're not going to jail," according to court documents. But the engineering director still refused to cooperate with the fraud.

The Justice Department's investigation and forensics obtained all emails and chats between JPMorgan and Jarvis, as well as all contacts between Jarvis and Frank executives, as well as external data experts and consultants.

According to the investigation, Jarvis spent $18000 to find an external data expert to forge a fake user list, and another $105000 to buy a real data packet including 4.5 million students from a consulting firm. The merger created a fake user list that included real identity information, and eventually fooled JPMorgan's merger and acquisition team.

In other words, she used just $120000 (currently about 826000 yuan) to defraud JPMorgan's $175 million purchase price (currently about 1.204 billion yuan), plus a bonus of more than $20 million. Incredibly, after such a serious fraud, Jarvis still works as a business executive at his new employer, talking about his success as a successful entrepreneur.

After the scam was thoroughly exposed, JPMorgan fired Jarvis last September and filed a claim against him, and the Frank business, which has only 250000 users, was completely shut down. However, Jarvis later sued JPMorgan, accusing JPMorgan of not understanding to hire him and demanding a multimillion-dollar bonus. It is worth mentioning that the lawyer hired by Jarvis also defended Mr Musk in a lawsuit filed by Tesla shareholders for privatisation tweets.

After the revelation of JPMorgan's fraud, Jarvis's former partners chose to pretend not to know her. LionTree, the investment bank that brokered the deal, quietly withdrew their introductions, and Ground Up, the venture capitalist who invested in Frank, deleted blogs showing off the investment.

(years of fraud were exposed) the JPMorgan M & A team apparently didn't do a good job of due diligence. A year before they discussed the acquisition, several members of the US Congress asked the Federal Trade Commission (FTC) to investigate Frank's fraudulent business operations and sent a letter warning Frank not to use students' personal data to obtain COVID-19 's rescue funds, while publicly demanding that Forbes magazine withdraw its "30 Under 30" honor to Jarvis.

After Jarvis was exposed for cheating JPMorgan, a number of industry people interviewed by the media revealed another image of Jarvis, as if they were not surprised by Jarvis's fraud. Jarvis, a startup partner interviewed by Forbes magazine, said, "that's the way she's been doing things, but now she's been caught."

The friend revealed that when Jarvis started Frank, she boasted to angel investors that her business already had thousands of student users, but it was all a lie. When employees worried about Jarvis's counterfeiting, Jarvis replied with peace of mind, "those pedantic people won't understand." this is the way to start a business, fake first until you Fake it 'til you make it. "

In an interview in 2021, Jarvis described herself like this: "as an entrepreneur, I obviously tend to be overly optimistic, sometimes it helps me, sometimes I don't. Of course, sometimes I look better than I am."

In fact, Jarvis's lie is not just about this acquisition. She publicly showed off when she was at Wharton, receiving and rejecting venture capital tycoon Peter Thiel's Thiel Fellowship venture capital (note: Tyre offers $100000 to help students drop out to start a business).

But Michael Gibson, the investor who was directly in charge of Thiel's project at the time, completely denied the claim, saying it was Jarvis's lie. "Jarvis has been bragging about it, but we have never invested in her," he said. because of her personal character, we don't believe in her project at all. She's been boasting, popping up names and pretending to know a lot about the technology industry. "

Ironically, Jarvis explained that he named the student loan platform Frank because he attached great importance to integrity and wanted to bring trust to users and partners, and Frank means honesty.

(Forbes magazine was ridiculed) after Jarvis's arrest, Forbes magazine's series of lists of young entrepreneurs and future business leaders also became the object of ridicule on social networking sites. Among the future business leaders they selected were too many young but daring fraudsters: Sam Bankman-Fried, founder of FTX, a cryptocurrency trading platform suspected of embezzlement of $10 billion; Martin Shkreli, a hedge fund manager who raised the price of a life-saving drug for Toxoplasma gondii by 50 times; and Trevor Milton, founder of Nikola, a hydrogen-powered car that went public without technology. And, of course, Elizabeth Homes, founder of Theranos, a blood test company notoriously deceiving investors.

They have successfully started a business at a young age and are worth hundreds of millions of dollars, but now it is the prison that awaits these fraudsters. Shkley was eventually sentenced to seven years in prison (five years in effect) with $72 million in compensation; Milton was convicted of fraud last year, the exact sentence of which has yet to be announced; and Holmes was sentenced to 11 years and three months in prison last year and is about to report to prison. Bankman, who was arrested at the end of last year, is facing 12 fraud charges, with a maximum sentence of more than 100 years.

(Forbes list is ridiculed) Silicon Valley entrepreneur Chris Bakke laments mockingly, "the young entrepreneurs selected by Forbes 30 Under 30 raised a total of $5.3 billion, but the fraudsters involved as much as $18.5 billion." it's incredible. "

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