The millennial founder who sold his company to JP Morgan for $175 million allegedly paid a college professor $18,000 to create 4 million accounts. Their email exchange is wacky

The fintech startup bought by JP Morgan Chase for millions may have been built on a lie, according to a new lawsuit filed by JP Morgan. And according to the investment bank, things went wrong with an $18,000 check to a data science professor in New York.

On Dec. 22, JP Morgan filed a lawsuit against Charlie Javis, the millennial founder of student aid platform Frank, and the company’s business development director Olivier Amara, alleging that the couple fabricated about 4 million non-existent accounts that they say were using their service, which JP Morgan acquired for $175 million in September 2021.

The investment bank closed Frank on Thursday, weeks after the lawsuit was filed. The bank alleges in its lawsuit that while it expected to acquire a business “deeply involved in the college age market segment” with over 4 million users, it actually received a customer list containing “no more than 300,000” accounts.

Alex Spiro, a spokesman for Havis, did not respond to Luckrequest for comment, but denied allegations against her to other news outlets. Javis sued JP Morgan in December, alleging that the bank used the Frank investigation as an excuse to fire her from her job at the company. Bloomberg reported. Spiro told the publication that the bank’s lawsuit was “nothing more than a front.” Luck failed to secure Amar’s representation.

JP Morgan claims that in 2021, when the bank and Javice first discussed the acquisition, Frank was “nearly 4 million customer accounts short” at the bank. To make up for the shortfall, before providing JP Morgan with Frank’s official customer account details for due diligence, the bank claims that Javis and Amar first approached an unnamed platform development director to create “synthetic data” — fake customer information generated by computer algorithms. .

According to the JP Morgan lawsuit, the engineer felt embarrassed asking if the request was “legitimate” and ultimately refused, so Javis and Amar allegedly resorted to an outside source who was simply referred to as “a data professor at New York College.” » in the litigation.

The professor allegedly agreed, according to the lawsuit, and was willing to provide “creative solutions” to Javis and Amar’s data problems. This was followed, according to the lawsuit, by a series of extraordinary email exchanges.

“Should I try to fabricate them?”

A data science professor was tasked with creating data for almost 4.3 million customers for Frank, including names, emails and birthdays, according to the JP Morgan lawsuit, and it was allegedly clear from the start that the professor and Javis were both fully aware that the information will be fictitious.

While creating the names of new clients, the professor allegedly emailed Javis with a proposed model for weeding out the names of real people by independently checking first and last names to “ensure that none of the selected names are real.”

In another email, the professor allegedly noted how many of the account’s personal information stories were the same, including an unnatural frequency of high school and hometown names being repeated. Such a list “would look [him] if [he] should have checked it out,” wrote the professor. When it came to creating phone numbers, Javis allegedly told the professor that some duplicate numbers in accounts were acceptable, as long as no more than “5–7%” copies were allowed, according to the lawsuit.

Physical addresses proved to be one of the biggest stumbling blocks due to the difficulty of generating unique addresses, according to the lawsuit, when a professor allegedly told Javis at one point that they were “wasting too much time on the address thing.” Early in the process, the professor allegedly told Javis that he was having trouble finding plausible addresses. “Should I try to fabricate them?” he asked, to which Javis replied, “I just wish the street didn’t exist in the state.”

According to the JP Morgan lawsuit, the data science professor sent Javis a bill for $13,300 for his troubles. But a summary of his work allegedly proved problematic, as the professor allegedly wrote down the individual positions of every fake information field he helped create. Javis “immediately” asked the professor to redo the bill with one line “data analysis”, promising him a bigger bonus and increasing the bill to $18,000, according to the lawsuit, and then the professor allegedly complied with the request.

This was stated by JP Morgan spokesman Pablo Rodriguez. Luck that disputes between the bank and Javice should be settled in court.

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

This story was originally published on Fortune.com.

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