by Matthew Russell Lee, Patreon Book Substack
SDNY COURTHOUSE, Sept 22 – 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:
All rise!
AUSA: JPM Chase will finish producing its privilege logs by November. Then we could set a motion schedule.
Javice's lawyer Alex Spiro: My client was arrested in April. We want their internal communications. Judge: I want a conference earlier, on privilege disputes. I'm not pleased with JPMorgan's delay. AUSA: We'll let them know.
[Strange that JPMC doesn't have a lawyer here. There are 3 people in the gallery Inner City Press doesn't recognize]
Judge: I want JPM's production complete by Oct 13, with privilege logs on a rolling basis... We meet Seot 26, at 2:30.
Spiro: Let's not have groundhog's day again. JPM seems to be driving the process. We need the names of record custodians
AUSA: We can't tell JP Morgan how to respond to the subpoena. It seems the defendant wants to drive the bus--
Judge Hellerstein: I'll be driving the bus.
Co-defendant's lawyer Buckley: Speaking about the bus--
Judge Hellerstein: Let's not use that metaphor anymore.
AUSA: The Devil's in the details [Still using that one...] Spiro: We want a copy of the subpoena AUSA: They just keep demanding things Judge: What's new
[Co-defendant's lawyer Buckley passes a note to Spiro, who doesn't read it. At least at first. Pause is taken so the two prosecutors can whisper; now it's read] AUSA: We don't share subpoenas due to grand jury secrecy Rule 6(e) Spiro: We can subpoena the subpoena
Judge: By Sept 1, defendants must make all their custodian demands Buckley: The government has given us copies of other subpoenas, and riders thereto- Judge: The text of the subpoenas by Aug 30
Judge Hellerstein: Chase will have to be here [in court] on Sept 26, the documents should be brought to the courtroom for my ruling... Joint letter by Sept 21 [He is driving the bus]
Judge Hellerstein: So after Sept 26, we'll get together, to discuss a trial date and length of trial, on Oct 24. [Speedy Trial Act time excluded until then, on consent] Adjourned.
On September 22, the US Attorney's Office wrote in that "defendants... do not have the power to dictate or challenge the contours of the response of a third person to the Government's federal grand jury subpoenas. To allow otherwise would upend basic tenets of criminal law that date back to the found of this country."
Watch this site.
Back on May 22, Javice was arraigned, by video feed into the SDNY Mag Court. Inner City Press was there, thread here:
OK- now at Charlie Javice arraignment in SDNY Magistrates court - Javice is by video.
Mag Judge Gorenstein presiding. (Indicted case has been wheeled out to District Judge Hellerstein, who also has Trump removal of state criminal cass) Alex Spiro of Quinn Emanuel for Javice, also virtual
Judge Gorenstein read off, To drfraud JPMC and a certain other bank."
Next date is July 13, 2023.
On July 11, the US filed a superseding indictment, still four counts, but adding Olivier Amar.
This case is US v. Javice, 23-cr-251 (Hellerstein)
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