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Frank founder Charlie Javice ginned up 3.8 million fake accounts and repeatedly lied to JPMorgan to close $175 million deal, prosecutor says

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The young chief executive of a startup that claimed to have helped millions of college students apply for financial aid deployed a “brazen fraud” to sell the company to JPMorgan Chase & Co. for $175 million, a prosecutor said Wednesday in a closing argument to a jury in New York.

Charlie Javice, who appeared on Forbes’ “30 Under 30” list in 2019, is accused of dramatically exaggerating the customer base of her company, which operated under the name Frank. She and another former top executive face conspiracy and fraud charges.

Javice’s lawyer, Jose Baez, urged the jury to acquit his 32-year-old client, calling the case against her “incredibly flawed.” He cited a lack of evidence.

As he spoke, Javice smiled at times and turned her chair to face the jury.

Frank was created to simplify filling out the Free Application for Federal Student Aid, a complex government form used by students to apply for financial aid for college or graduate school.

Javice founded the company when she was in her mid-20s and was the subject of numerous media profiles that lauded her for building a system that would help financially needy students navigate a thicket of rules and eligibility requirements to get tuition aid.

The company once seemed like a pioneer among businesses that cater to college-age students, who banks encourage to open checking or credit card accounts in the hopes they’ll become lifelong customers.

Access to Frank’s client list is one of the things JPMorgan Chase was after when it entered into talks to buy the company in 2021.

At the time, Javice was claiming Frank had over 4.25 million clients. In reality, it had around 400,000, Assistant U.S. Attorney Nicholas Chiuchiolo told the jury.

Citing emails, text messages and other evidence, Chiuchiolo said Javice repeatedly lied to JPMorgan in the summer of 2021 to secure a buyout that would earn her $45 million.

When JPMorgan Chase sought to verify the client list, Javice first approached her company’s head of engineering, asking if he could produce “synthetic data” to show the company had over 4 million customers, the prosecutor said.

But the employee refused, saying he “would not do anything illegal,” Chiuchiolo said.

Javice eventually hired an outside data scientist for $105,000 to create a data set showing over 4.2 million students, prosecutors said.

Javice did not testify during the five-week trial. The Miami Beach, Florida, resident was arrested in April 2023 and is free on bail. The jury was expected to begin deliberations Thursday.

This story was originally featured on Fortune.com



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Trump reportedly told members of his Cabinet that Elon Musk will pull back from DOGE ‘soon’

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  • President Donald Trump told the Cabinet that world’s richest man Elon Musk will leave his administration post “soon,” specifically within the coming weeks, according to a Politico report. Musk’s involvement in the government has caused public sentiment around his company’s to deteriorate; a departure from the executive branch would allow him to return to his businesses. The White House publicly rejected the reports, calling the news “fake.” 

President Donald Trump has alerted those in his inner circle, including some members of the Cabinet, that Elon Musk will be stepping away from his role as the figure-head of the Department of Government Efficiency (DOGE) within weeks, according to a report by Politico.

While Trump emphasized that he was pleased with Musk and the efforts of DOGE, both have reportedly mutually decided that it was time for Musk to transition into a supporting role in Washington so he can return to his businesses, according to three anonymous Trump insiders. 

“I think he’s been amazing, but I also think he’s got a big company to run…And at some point he’s going to be going back. He wants to,” Trump told reporters Monday.

Musk, categorized as a special government employee (SGE), has been busy slashing federal spending and is slated to end his stint in the White House in late May, when he reaches the 130-day SGE working caps. The report comes more than a month after a senior political advisor close to Trump told Politico that Musk was “here to stay,” and would exceed his 130-day timeline. 

One senior administration official told Politico it’s likely that Musk will hold an informal advisory position and continue to make occasional appearances at the White House. Another said in the same report anyone who believes Musk will leave Trump’s eye is “fooling themselves.”

Press Secretary Karoline Leavitt said in an X post Wednesday the Politico report was “garbage,” and the two have agreed that Musk will leave the White House as a special government employee when he completes his work with DOGE.

Additionally, White House spokesman Harrison Fields told Fortune the report is “fake news.”

“This is exactly why President Trump and DOGE have terminated millions of dollars in wasteful, government contracts to so-called news organizations that have diminished their credibility with the American people,” Field said, referencing Politico’s ties to USAID budget cuts.

Musk has sparked frustration among those close to and within the Trump administration who view the world’s richest man as a political liability. Most notably, Musk publicly backed and bankrolled a conservative judge who lost a bid for a Wisconsin Supreme Court seat by a wide margin Tuesday, indicating public sentiment around the billionaire. 

Last week, Trump began paving the way for Musk’s exit from Washington, telling Cabinet members Musk would be beginning his transition out of the executive branch, according to an insider who was not in the meeting, but briefed on what was said.

Throughout Musk’s political endeavors, his businesses have taken a toll, specifically Tesla. Last month, Musk publicly admitted that he was running his businesses with “great difficulty,” while juggling his federal duties. 

After the Politico report came out, however, the EV maker’s stock jumped, signaling that Musk could turn his focus back to Tesla after the company endured a tough stretch.

Tesla has been the chief victim of Musk’s political activism, and while his departure from DOGE likely won’t do much to boost demand in Europe, it should help put a floor under demand in the U.S.

Tesla stock has dropped more than 5% over the past month, and plunged more than 31% year-over-year. Additionally, shares fell 36% in the first quarter, its largest quarterly slip since 2022.

This story was originally featured on Fortune.com



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DOGE could worsen America’s child care crisis with cuts to programs: ‘You could almost feel the wave of panic’

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Some free measles vaccine clinics in Texas are closing due to federal funding cuts

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  • Texas healthcare officials are cancelling 50 planned vaccination clinics as measles spreads throughout the state. The decision comes as the CDC and Department of Health and Human Services have cut funding, which was originally allocated to communities during the pandemic.

Cuts to federal funding have forced healthcare officials in Texas to shutter 50 planned vaccination clinics in Dallas, one the state’s most populated areas, as a measles outbreak continues to grow across the state.

Many of those clinics had been planned for areas where vaccination rates for measles, mumps and rubella were low. The shots would have been freely offered to families.

The decision follows $11.4 billion in funding cuts by the Centers for Disease Control and Prevention and the Department of Health and Human Services. That money, originally, was allocated to community health departments during the pandemic. Last week, however, HHS said it would “no longer waste billions of taxpayer dollars responding to a non-existent pandemic that Americans moved on from years ago.”

While COVID is not as big of a concern these days, Texas has 422 confirmed cases of measles at the moment. While none are in Dallas, health officials are trying to protect that city, given how fast the disease can spread.

Due to the cuts, 11 full-time and 10 part-time staffers at the Dallas County Health and Human Services Department have been let go, which officials say could impact their ability to fight the spread of the disease. The majority of those workers either gave vaccines or were epidemiologists and lab staff involved with measles surveillance and prevention.

(Clinics in West Texas, where many of the cases are, will continue for now.)

The cuts come a month after Robert F. Kennedy Jr., a vaccine critic and the nation’s top health official, said his agency would continue to fund Texas’ immunization program and that ending the outbreak was a “top priority” for him and his team.

This story was originally featured on Fortune.com



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