JPMorgan Chase & Co. is once again grappling with the aftershocks of its ill-fated 2021 acquisition of the student-loan startup Frank—this time in the form of a staggering $115 million in legal fees. As first reported by Bloomberg, the sum covers defense costs for Charlie Javice and Olivier Amar, the two executives convicted of defrauding the bank in one of the most closely watched white-collar cases on Wall Street.
The revelation came shortly after Javice received a seven-year prison sentence, marking the latest chapter in a saga that has captivated both the financial and legal worlds. The $115 million price tag represents roughly two-thirds of the $175 million JPMorgan paid for Frank—a company prosecutors say inflated its user base by fabricating millions of fake student accounts.
A Delaware court had previously ruled that JPMorgan was contractually obligated to advance legal costs under the terms of the Frank merger agreement. Despite the bank’s repeated attempts to sidestep payment, the judge found that the indemnification clause applied even in cases of fraud allegations.
Legal experts say the eye-popping figure underscores just how expensive top-tier criminal defense can be when a Fortune 500 balance sheet is footing the bill. “Huge, huge number,” said Kevin O’Brien, a former federal prosecutor turned defense attorney. “She had a lot of high-priced legal talent.” Indeed, Javice’s team included star litigator Alex Spiro—known for representing Elon Musk—who billed over $2,000 an hour, according to court filings.
At one point, Javice was represented by 19 lawyers, while Amar had 16 of his own, with the combined legal army supported by dozens more paralegals and analysts behind the scenes. By comparison, Theranos founder Elizabeth Holmes reportedly amassed $30 million in legal costs before her 2022 conviction—less than a third of Javice’s tab.
The bank may eventually seek to recoup the funds. U.S. District Judge Alvin Hellerstein included the $115 million in JPMorgan’s $287.5 million restitution order, though the likelihood of recovery remains slim. Under the terms of her sentence, Javice is required to pay only 10% of her post-prison income toward restitution for 20 years—hardly a dent in the total.
The criminal case is only part of JPMorgan’s legal entanglement. Separate civil suits filed by the bank and the Securities and Exchange Commission remain on hold pending the resolution of appeals. Javice’s defense team has already indicated that she will challenge her conviction, potentially adding millions more to the tab the bank must advance.
For JPMorgan, the Frank debacle has become an enduring symbol of both corporate due diligence failure and the staggering cost of legal fallout. As Bloomberg noted, it’s a rare case where the victims of fraud end up paying to defend the fraudsters—proof, perhaps, that on Wall Street, the price of a bad deal can spiral far beyond the purchase itself.
