by Matthew Russell Lee, Patreon Book Substack
SDNY COURTHOUSE, Aug 20 – JPMorgan Chase bought a start-up called Frank, which claimed to have 4 million students signed up to file their FAFSA forms, for $175 million. Then Chase learned Frank had only 300,000 customers.
On April 4, 2023, Frank founder Ms. Charlie Javice was brought before U.S. District Court for the Southern District of New York Magistrate Judge Barbara C. Moses, represented by Quinn Emanuel.
The complaint quotes Javice messages with the engineers she hired to create the false data, and to enter in data she bought on the open market. To one of them, she is quoted, "We don't want to end up in orange jumpsuits."
In the tri-state, it is Westchester County Department of Corrections in Valhalla that dresses its inmates in orange. MDC Brooklyn uses beige; Essex County Corrections Facility in New Jersey uses yellow.
In any event, white collar defendant Javice, who took on an appropriately or strategically contrite look on Worth Street still barricaded for the nearby state court arraignment of former President Donald Trump, was freed on $2 million bond, travel restricted to SDNY and EDNY and the Southern District of Florida, where she lives.
On May 18, Javice was indicted on bank, wire and securities fraud counts, and the case assigned to District Judge Alvin K. Hellerstein.
In June the US prosecutors sought to intervene in and stay the SEC's case against Javice. Inner City Press attended and covered the oral argument and now first reports that Judge Lewis J. Liman has granted the motions to intervene and stay, noting among other things that "Javice will have access to a vast amount of material usable in the civil case through the means of Rule 16 discovery in the criminal case. That discovery will include virtually all of the SEC’s investigative file. And it will include documents from at least 30 different third parties. She has not made a convincing case that she needs more document discovery to be prepared to move quickly in this case when the criminal case is resolved and the stay is lifted."
The (stayed) civil case is Securities and Exchange Commission v. Javice et al, 23-cv-2795 (Liman)
On July 13, Javice and her co-defendant were arraigned, and Judge Hellerstein asked why JPMC didn't find the fraud in due diligence. Inner City Press was there, thread:
All rise!
Judge: How do you plead? Javice: Not guilty. Judge: How do you pronounce your name? Javace? Javice: "Jah-veese."
Judge: And Mr Amar?
Amar (takes off COVID mask still required in this courtroom) Not guilty
Judge Hellerstein: I'm puzzled, why didn't JP Morgan Chase figure this out during due diligence? AUSA: They created fake data. [Javice is shaking her head No, pink cardigan tied over her shoulders]
Judge: Defense wants a delay? Spiro: The US is just regurgitating JPM Chase's civil case. AUSA: Mr Spiro is confused about Rule 16. Judge: Can you subpoena JPMC? AUSA: We'd have to see if that complies with Rule 17. Judge to AUSA: Why don't *you* subpoena JPMC?
AUSA: We'll be getting it. Judge: We'll meet in 30 days. August 15 at 11 am. I'll sent a motion schedule at that time. Adjourned.
On July 27, the prosecutors wrote it to say they are unavailable on August 15, and that the Court said it would be available on September 20. But Javice will not consent to exclude Speedy Trial Act time until then. Letter on Patreon here.
On August 23, Inner City Press was there. Thread.
On September 26, Judge Hellerstein held a conference and ordered: "Briefing schedule: Deft's by 10/13; Govt's by 10/27; Hearing set for 11/2/23 at 2:30 p.m.; Time excluded until 11/2/23; in the interest of justice; Stat. conf. previously set for 10/24/23 is adjourned; Defts. cont'd. on bail."
On November 7 Judge Hellerstein set a trial date of October 15, 2024.
On November 10 - Veteran's Day - Javice's lawyers filed "On November 9, 2023, I served a subpoena to JPMorgan Chase Bank, N.A. (“JPMC”), issued pursuant to Federal Rule of Criminal Procedure 17(c) (the “JPMC Subpoena”), by email to Ms. Kristy Greenberg, partner at Hogan Lovells US LLP, and counsel for JPMC. 3. Also on November 9, 2023, Ms. Greenberg responded confirming that she was willing and authorized to accept service of the JPMC Subpoena by email on behalf of JPMC."
On August 6 there was a hearing, or a series of Judge Hellerstein rulings, on privilege claims. Inner City Press was there. Thread:
Judge Hellerstein: I will read and rule on these messages chronologically... Setting up a call, not privileged. Next, about options, it's advice, it's privileged... This one involves lawyers, but it is not advice. It is not privileged.
On August 20, Judge Hellerstein ordered: "ORDER as to Charlie Javice, Olivier Amar: The parties agree that by September 6, 2024, each defendant will give notice if he or she intends to present a defense based on advice of counsel. Each defendant is so-ordered. The parties dispute what such disclosure should include. The government argues that the "specific bases, and scope" of the defense should be provided, including: (a) which attorneys, if any, the defendants purportedly relied on; (b) the timing and substance of the alleged advice upon which the defendants relied; and (c) all documents (including attorney-client and attorney work product documents) currently in the defendants' possession, custody, or control that support or might impeach or undermine any such defense. ECF No. 148. Defendants state that they are "not able to comply with the full scope of the government's broad and unusual disclosure demand at this time." Id A disclosure is meaningless without content. Defendants, if they intend to present advice-of-counsel evidence or arguments at trial, shall identify the attorney or attorneys who gave the advice, when they gave the advice, and if oral, the substance of the advice, or, if written, the documents upon which defendants relied. Defendants state that they may be unable to disclose documents possessed by JPMC due to its assertion of the attorney--client privilege. Defendants shall identify any such documents and, if not produced by JPMC, file a motion to seek disclosure. (Signed by Judge Alvin K. Hellerstein on 8/20/2024)."
This case is US v. Javice, et al., 23-cr-251 (Hellerstein)
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