Javice Sought ‘Synthetic’ Data for JPMorgan Deal, Jury Told

(Bloomberg) — The former head engineer of the failed student-finance startup Frank testified that when he asked company founder Charlie Javice if her request to create “synthetic” customer data was legal, she told him in his native French that she didn’t intend to “end up in an orange jumpsuit.” 

Patrick Vovor told jurors he didn’t want to do anything illegal and declined to provide the data. The dramatic testimony by Vovor, now a JPMorgan Chase & Co. employee, came at the end of a week that provided additional details of the bank’s vetting of its failed $175 million acquisition of Frank in 2021. 

Vovor testified Thursday as a prosecution witness in the criminal fraud trial of Javice and former Chief Growth Officer Olivier Amar. He told jurors about an Aug. 2, 2021, Zoom meeting in which he said the two Frank executives asked him to create data for 4 million non-existent users.

“I asked them if it was even legal, this request,” said Vovor, who is now a senior engineering manager at JPMorgan, where he was hired in the acquisition. “I told them that I would not do anything illegal.”

Prosecutors allege Javice and Amar lied to the bank, claiming Frank had more than 4 million users when it actually had fewer than 300,000, and used phony data to make sure the deal closed. Vovor’s testimony, which continues Monday, could be key to determining their guilt or innocence. After Vovor, prosecutors said they will call the data scientist who allegedly created the fake customer list they claim Javice and Amar used to defraud JPMorgan.

In addition to questioning the legality of the request, Vovor said he asked why Matt Glazer, Frank’s general counsel and head of human resources, was not on the Zoom call. He testified that Glazer had been on other calls when Vovor was asked to provide engineering information to JPMorgan and to Capital One Financial Corp., another suitor that withdrew from the process.

The day before the Zoom call, Vovor testified, Javice called to ask how easy it would be “to take a user base of about 300,000 users and grow it to 4 million users.” The government also showed jurors an email that Javice sent to Vovor, linking to an article about creating synthetic data for privacy purposes.

After the call with Javice and Amar, they asked Vovor to extract Frank’s user data on its roughly 300,000 users and provide it to them. He said he did so.

Javice and Amar have pleaded not guilty. They claim they didn’t intend to mislead JPMorgan, arguing that the bank rushed due diligence on the deal and wasn’t focused on the number of customers. 

In addition, Amar has distanced himself from his former boss, working to show that he provided correct data to JPMorgan and wasn’t involved in key meetings and email exchanges. Lawyers for both defendants unsuccessfully requested separate trials, claiming their incompatible defense strategies don’t allow for a fair trial.

The engineer’s testimony came over the objection of lawyers for both defendants. 

“Vovor should not be able to comment on something being legal or illegal,” Ronald Sullivan, a lawyer for Javice, argued to US District Judge Alvin Hellerstein. He said the testimony could confuse jurors and unfairly prejudice them against his client. The judge disagreed and allowed the question.

A prosecutor argued the testimony is evidence that Javice and Amar were acting “with a criminal intent.”

During a break in the testimony, a prosecutor complained to the judge that “Ms. Javice is laughing and making faces at the witness, and it just needs to stop.”

Hellerstein said he didn’t see Javice making faces and declined to make a ruling.

“Ms. Javice herself knows the difference between being professional and not, and I leave it to her to appropriately act in court,” the judge told the lawyers. “That’s all I need to say.”

Earlier in the trial, the same lawyer told the judge that Javice was commenting on the testimony of a different witness, loudly enough for jurors to hear. Hellerstein warned both sides against making audible remarks.

Earlier in the day, Alex Sweeney, a JPMorgan managing director, testified that Javice “initially pushed back” on the bank’s request for more user data during due diligence.

Sarah Youngwood, former chief financial officer for JPMorgan’s consumer bank and now Nasdaq’s chief financial officer, also testified as one of the executives who approved the acquisition.

Sweeney, who oversaw data validation for JPMorgan on the deal, said the bank requested additional detail on about 20 categories of Frank data that could be used to sell customers on checking accounts and other financial products. He said he was surprised when Javice resisted, raising concerns about customer privacy and saying Frank would not turn over all of its data before reaching a deal.

Frank eventually provided data showing 4.25 million users that was validated by Acxiom. Prosecutors claim the data by Frank provided was fake.

Youngwood is the latest senior executive to testify as a prosecution witness. Last week the jury heard testimony from Leslie Wims Morris, who led the nearly 350 people at JPMorgan who aided with due diligence on the Frank deal. Wims Morris, now CEO of the bank’s auto loan division, testified that the bank was focused on increasing its share of customers aged 18 to 24. 

The CFO testified that she recommended the deal after Acxiom affirmed the number of Frank users. 

Sweeney said that Javice told him she did her own analysis of the data provided to Acxiom. She later let him know the results of the Acxiom analysis. 

“It’s a match so no surprises,” Javice texted Sweeney.

Javice and Amar face a maximum sentence of 30 years in prison if convicted of the most serious charge against them. 

The case is US v Javice, 23-cr-00251, US District Court, Southern District of New York (Manhattan).

(Updates to include trial details in 14th paragraph.)

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