US charges second Frank college aid executive with defrauding JPMorgan

By Luc Cohen

NEW YORK (Reuters) – U.S. prosecutors on Wednesday unveiled an indictment charging Olivier Amar, who helped run college financial aid startup Frank, with defrauding JPMorgan Chase (NYSE:) into buying their company for $175 million.

Amar, who was Frank’s chief growth officer, was charged with wire fraud, bank fraud, securities fraud and conspiracy, becoming the second company official indicted in the case.

Frank founder Charlie Javice was arrested in April and later pleaded not guilty to the same four counts.

Lawyers for Amar, whose whereabouts were not immediately known, did not immediately respond to a request for comment. A spokesman for the U.S. Attorney’s office in Manhattan also did not immediately respond to a request for comment.

Federal prosecutors have said Javice repeatedly lied about Frank to the largest U.S. bank, including by claiming that she had lined up 4.25 million student customers when in fact she had data for only about 300,000. 

JPMorgan has said it learned of Javice’s fraud after sending marketing materials to people who she claimed were real, and finding that just 28% were delivered and 1.1% were opened, far fewer than in other similar campaigns.

The bank shut down Frank in January, and Chief Executive Jamie Dimon branded the acquisition a “huge mistake.”

In December, JPMorgan sued Javice and Amar in Delaware federal court.

Javice filed counterclaims in February, accusing JPMorgan of harming her reputation and withholding about $28 million of payments. She and Amar are seeking to dismiss the bank’s claims.