Charlie Javice, the onetime entrepreneur accused of defrauding JPMorgan Chase in its $175 million acquisition of her college-loan-planning site, said the bank was not sticking to a court order requiring it to pay for her legal defense.
Javice, 31, claimed in a court filing Wednesday in Delaware that JPMorgan had improperly rejected $830,000 in bills from her lawyers, amounting to about 20% of her legal costs to date. She asked for a court order forcing JPMorgan to pay the bills.
Delaware Chancery Court Judge Kathaleen St. J. McCormick ruled in May that JPMorgan was obligated to cover Javice's legal bills under the September 2021 merger agreement by which it acquired her company, Frank. The deal made her a managing director and head of student solutions at the bank.
JPMorgan sued Javice and another Frank executive, Olivier Amar, in December, saying it had discovered they vastly inflated the number of customers at Frank. In April, both were charged with fraud by Manhattan federal prosecutors, who said they falsified information to show the company had 4.25 million customers when it actually had fewer than 300,000. The bank shut down Frank shortly after it filed its suit.
Javice and Amar have both pleaded not guilty. They each face a maximum sentence of 30 years in prison if convicted of the most serious fraud charges.
In her filing on Wednesday, Javice said JPMorgan had objected to some of her legal bills based on the topics addressed and way her lawyers' time was billed. Her defense is being led by Quinn Emanuel Urquhart & Sullivan partner Alex Spiro, who is also the regular lawyer for Elon Musk.
Javice claims the bank is using such objections to gain a "litigation advantage" over her. JPMorgan's suit has been put on hold while the criminal case moves forward.
Pablo Rodriguez, a JPMorgan spokesman, didn't immediately return an email Thursday seeking comment about the legal-fee filing.
JPMorgan had argued that Javice's alleged fraud fell outside the merger agreement and that it shouldn't be required to cover her costs. McCormack ruled that the merger agreement didn't contain a "carve out" allowing JPMorgan to deny paying for Javice and Amar's defense.
The bank said in February that she should pay for her lawyers with the $21 million she made from the Frank deal. It later suggested she was trying to hide assets by moving millions previously held at JPMorgan to shell company accounts.
Javice has said her assets were seized by federal prosecutors. She said her initial transfers out of JPMorgan came after the bank put her on administrative leave in September 2022. "She no longer wanted to bank with an entity that was retaliating against her and baselessly accusing her of severe misdeeds," Javice said in an April court filing.
She initially moved her money to Signature Bank. "As it happened, that timing was ill-fated," she said, adding that she managed to transfer her funds again before that bank collapsed in March.
The case is Javice v. JPMorgan Chase Bank NA, 2022-1179, Delaware Chancery Court (Wilmington).
