JPMorgan says Frank founder Charlie Javice’s ‘army’ of 77 defense lawyers is overbilling

JPMorgan says Frank founder Charlie Javice's 'army' of 77 defense lawyers is overbilling

JPMorgan Chase & Co. said it’s being overbilled by an “army” of lawyers working for Charlie Javice, the onetime entrepreneur accused of defrauding the bank in a $175 million buyout of her college-loan-planning site.

Javice has a team of three law firms working on her defense, with a total of 77 attorneys representing her, the bank said in a filing in Delaware Chancery Court that was made public Monday. Her lead lawyer, Alex Spiro, is charging the bank $2,025 an hour to defend her against both criminal charges and the bank’s lawsuit over the deal, the unsealed filing shows. 

While Javice has faulted the bank for rejecting $830,000 in fees out of the total $5.4 million her lawyers billed to JPMorgan, the bank is complaining that she’s seeking reimbursement for legal work that isn’t subject to a judge’s order.

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 through which it acquired her company, Frank. The deal made her a managing director and head of student solutions at the bank.

Spiro – best-known for representing Elon Musk in several high-profile disputes – didn’t respond to phone and email messages seeking comment on the bank’s filing. 

JPMorgan sued Javice and another Frank executive, Olivier Amar, in December, saying it had discovered they vastly inflated the number of customers at the startup. 

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.

The bank said in February that Javice 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. The bank also has complained about her lawyers’ billing methods.

Javice has complained that prosecutors seized her assets as part of the criminal case. 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’s lawyers said in an April court filing. 

The case is Javice v. JPMorgan Chase Bank NA, 2022-1179, Delaware Chancery Court (Wilmington).

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