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NEW YORK – The founder of Frank, a student loan assistance startup company that J.P. Morgan Chase acquired for $175 million two years ago, was arrested on charges that she duped the financial giant by dramatically inflating the number of customers her company had, authorities said.

Charlie Javice, 31, of Miami Beach, Florida, was arrested Monday night in New Jersey on conspiracy, wire and bank fraud charges.

A charging document in Manhattan federal court said she claimed her company had over four million users when it had fewer than 300,000 customers.

“This arrest should warn entrepreneurs who lie to advance their businesses that their lies will catch up to them.” US Attorney Damian Williams

Authorities said Javice, who appeared on the Forbes 2019 "30 Under 30" list, would have earned $45 million from the fraud.

Javice and her lawyer declined to comment as they left court after Javice signed a $2 million bond and agreed to curfew and possible electronic monitoring if court officers decide it is necessary. 

She also agreed not to contact key figures in the case — including investors — except for her mother and her mother's boyfriend.

In a release, U.S. Attorney Damian Williams said Javice "engaged in a brazen scheme" to defraud the acquiring financial company by fabricating data to support lies she told in a bid to make tens of millions of dollars from the sale of her company.

"This arrest should warn entrepreneurs who lie to advance their businesses that their lies will catch up to them," he said.

According to a criminal complaint, Javice in 2017 founded TAPD Inc., which operated under the name Frank, to provide an online platform to simplify the process of filling out the Free Application for Federal Student Aid, a free federal government form used by students to apply for financial aid for college or graduate school.

In 2021, Javice sought to sell her company in her role as its chief executive to a large financial institution, the complaint said.

When JPMC sought to verify that her company had 4.25 million customers, Javice asked her company's director of engineering to create an artificially generated data set, but the individual declined, it said.

She then hired an outside data scientist to create the synthetic data set as she purchased for $105,000 on the open market real information for over 4.25 million students, the complaint said. But it added that the data she purchased did not contain all of the information she had told JPMC was maintained by Frank.

“Rather than help students, we allege that Ms. Javice engaged in an old school fraud.” Gurbir S. Grewal, director of the SECs Division of Enforcement

In a civil complaint filed by the Securities and Exchange Commission, the regulatory agency alleged that Javice made numerous misrepresentations about Frank's alleged millions of users to entice JPMC to purchase the now shuttered Frank.

Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said in a release that "even non-public, early-stage companies must be truthful in their representations."

He added: "Rather than help students, we allege that Ms. Javice engaged in an old school fraud: she lied about Frank’s success in helping millions of students navigate the college financial aid process by making up data to support her claims, and then used that fake information to induce JPMC to enter into a $175 million transaction."

LARRY NEUMEISTER, with the Associated Press, helped contribute to this report.

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Israel to continue with Gaza City offensive despite talks to free Hamas hostages

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Israel to continue with Gaza City offensive despite talks to free Hamas hostages

Israel will resume negotiations with Hamas for the release of all hostages captured during the October 7 attack, Benjamin Netanyahu has said – but its military will continue its Gaza City offensive despite international outcry.

The remarks from Israel’s prime minister are the first since Hamas agreed to a temporary ceasefire proposal.

Talks will also be with a view to ending the war, but Mr Netanyahu said it must be on “terms acceptable to Israel”.

In the meantime, the Israel Defence Forces (IDF) have begun calling medics and international organisations in northern Gaza to encourage them to evacuate to the south ahead of the expanded operation in Gaza City.

Many of Israel’s closest allies have urged the government to reconsider. Some Israelis fear it could doom the remaining 20 or so living hostages taken by Hamas-led militants in the 7 October 2023 attack which ignited the war.

Israel plans to call up 60,000 reservists and extend the service of 20,000 more.

Displaced Palestinians fleeing northern Gaza. Pic: Reuters
Image:
Displaced Palestinians fleeing northern Gaza. Pic: Reuters

Speaking to soldiers near Israel’s border with Gaza, Mr Netanyahu said he was still set on approving plans for defeating Hamas and capturing Gaza City.

“At the same time I have issued instructions to begin immediate negotiations for the release of all our hostages and an end to the war on terms acceptable to Israel,” he said.

“These two things – defeating Hamas and releasing all our hostages – go hand in hand,” he added.

The latest ceasefire proposal drawn up by Egypt and Qatar is almost identical to an earlier one that Israel accepted before the talks stalled last month.

The proposal would include the release of some hostages in exchange for Palestinian prisoners, a pullback of Israeli forces and negotiations over a lasting ceasefire.

An Israeli strike on a tent camp in Deir Al-Balah. Pic: Reuters
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An Israeli strike on a tent camp in Deir Al-Balah. Pic: Reuters

‘Don’t tell us where to build’

Israeli strikes killed at least 36 Palestinians across Gaza on Thursday, according to local hospitals, including at a tent camp in Deir al-Balah.

Meanwhile, Israel’s ambassador to the UK, Tzipi Hotovely, was summoned to the Foreign Office in response to a controversial West Bank settlement plan which has been given final approval.

The project, known as the E1 settlement, would effectively cut off the occupied West Bank from East Jerusalem and divide the territory in two.

The UK and 21 international partners have released a statement to condemn the decision “in the strongest terms” calling it “a flagrant breach of international law” and “critically undermining a two-state solution”.

Ms Hotovely gave Sky News her response to the meeting: “I said we wouldn’t tell the British where to build in London. Don’t tell us where to build in Jerusalem, our capital. We see E1 as part of Greater Jerusalem.”

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What would a two-state solution look like?

UK warns of ‘horrifying starvation’

The UK has also responded to comments from the head of the UN Palestinian refugee agency UNRWA that famine in Gaza is “deliberate” and being used as an “instrument of war”.

Minister for the Middle East, Hamish Falconer, has called for a “comprehensive [peace] plan to end this misery and get to a long-term settlement”.

“Israel must immediately and permanently lift all barriers preventing aid reaching the people of Gaza to prevent the horrifying starvation in the Strip continuing,” he added.

Read more from Sky News:
Is Netanyahu is ready to negotiate?
Palestinians flee Israeli advance

Palestinians wait to receive food from a charity kitchen in Khan Younis. Pic: Reuters
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Palestinians wait to receive food from a charity kitchen in Khan Younis. Pic: Reuters

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Demand for Gaza media access

The Media Freedom Coalition, which includes the UK and 50 other countries, has called on Israel to allow foreign media access into Gaza.

In a joint statement, the coalition, which is a partnership of countries working to defend media freedom, urged Israel to “allow immediate independent foreign media access” and “afford protection for journalists operating in Gaza”.

They said this was in light of the “unfolding humanitarian catastrophe in Gaza”.

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UK

Shoreham air crash: Families mark 10 years since one of UK’s worst airshow disasters

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Shoreham air crash: Families mark 10 years since one of UK's worst airshow disasters

On the 10th anniversary of the Shoreham air disaster, the families of some of those killed have criticised the regulator for what they describe as a “shocking” ongoing attitude towards safety.

On 22 August 2015, a vintage fighter jet plummeted out of the sky and crashed into one of the busiest roads in Sussex, killing 11 men.

Most of them weren’t even watching the aerobatic display overhead when they were engulfed in a fireball that swept down the dual carriageway.

A crane removes the remains of the fighter jet that crashed on the A27. File pic: Reuters
Image:
A crane removes the remains of the fighter jet that crashed on the A27. File pic: Reuters

Jacob Schilt, 23, and his friend Matthew Grimstone, also 23, were driving to play in a match for their football team, Worthing United FC.

Both sets of parents are deeply angry that their beloved sons have lost their lives in this way.

“It obviously changed our lives forever, and it’s a huge reminder every 22nd of August, because it’s such a public anniversary. It’s destroyed our lives really,” his mum, Caroline Shilt, said.

“It was catastrophic for all of us,” Jacob’s father, Bob, added.

Jacob Schilt died in the Shoreham disaster
Image:
Jacob Schilt died in the Shoreham disaster

Matthew Grimstone on his 23rd birthday, the last before he died in the Shoreham disaster
Image:
Matthew Grimstone on his 23rd birthday, the last before he died in the Shoreham disaster

‘They had no protection’

Sue and Phil Grimstone argue that the regulator, the Civil Aviation Authority (CAA), has not been held accountable for allowing the airshow to take place where it did.

“At Shoreham, the permission given by the CAA did not allow displaying aircraft to perform over paying spectators or their parked cars,” they said.

“But aircraft were permitted to fly aerobatics directly over the A27, which was in the display area, a known busy road.

“This was about ignoring the safety of people travelling on a major road in favour of having an air show. They had no protection.”

Sue and Phil Grimstone say the CAA has not been held accountable
Image:
Sue and Phil Grimstone say the CAA has not been held accountable

A programme for a memorial for Jacob Schilt and Matthew Grimstone
Image:
A programme for a memorial for Jacob Schilt and Matthew Grimstone

Caroline and Bob Schilt
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Caroline and Bob Schilt

A series of catastrophic errors

The crash happened while the experienced pilot, Andy Hill, a former RAF instructor, was attempting to fly a loop in a 1950s Hawker Hunter jet.

But he made a series of catastrophic errors. His speed as the plane pitched up into the manoeuvre was far too slow, and therefore, he failed to get enough height to be able to pull out of the dive safely. The jet needed to be at least 1,500ft higher.

Mr Hill survived the crash but says he does not remember what happened, and a jury at the Old Bailey found him not guilty of gross negligence manslaughter in 2019.

Andrew Hill arrives at the Old Bailey in London in 2019.
Pic: PA
Image:
Andrew Hill arrives at the Old Bailey in London in 2019.
Pic: PA

When the inquest finally concluded in 2022, the coroner ruled the men had been unlawfully killed because of a series of “gross errors” committed by the pilot.

The rules around air shows have been tightened up since the crash, with stricter risk assessments, minimum height requirements, crowd protection distances, and checks on pilots.

But Jacob and Matt’s families believe the CAA still isn’t doing enough to protect people using roads near airshows, or other bystanders not attending the events themselves.

Emergency services attend the scene on the A27.
Pic: PA
Image:
Emergency services attend the scene on the A27.
Pic: PA

The families recently raised concerns about the Duxford airshow in a meeting with the CAA.

While aircraft are no longer allowed to fly aerobatics over the M11, they do so nearby – and can fly over the road at 200ft to reconfigure and return. If the M11 has queuing traffic in the area, the display must be stopped or curtailed.

The Grimstones believe this demonstrates accepting “an element of risk” and are frustrated that the CAA only commissioned an independent review looking at congested roads and third-party protection earlier this year.

“We feel the CAA are still dragging their feet when it comes to the safety of third parties on major roads directly near an air show,” they said.

The family have complained about the CAA to the parliamentary ombudsman.

A memorial for the Shoreham Airshow victims  on the banks of the Adur in Shoreham
Image:
A memorial for the Shoreham Airshow victims on the banks of the Adur in Shoreham

‘There are still question marks’

Some experts also believe the CAA has questions to answer about a previous incident involving Mr Hill, after organisers of the 2014 Southport Airshow brought his display to an emergency stop because he had flown too close to the crowd, and beneath the minimum height for his display.

In its investigation into the Shoreham disaster, the Air Accident Investigation Branch (AAIB) later found that while the CAA inspector present had an informal discussion with the pilot, no further action was taken, and the incident was not reported to the AAIB.

Retired pilot Steve Colman has spent many years looking into what happened at Shoreham, and he believes the CAA failed to fulfil their statutory obligation to fully investigate and report the incident at Southport.

“You have to ask the question – if the Southport incident had been investigated, then was Shoreham more likely or less likely to have occurred?” he said. “I think there can only be one answer – it’s less likely to have occurred.”

Tim Loughton, who was the MP for Shoreham at the time, believes a balance must be struck.

“We don’t want to regulate these events out of existence completely. A lot of the smaller air shows no longer happened because they couldn’t comply with the new regulations […], but certainly there are still question marks over the way the CAA conducted and continues to conduct itself. I would welcome more parliamentary scrutiny.”

Read more from Sky News:
London Underground workers to strike
Man charged with killing ice cream seller

Shoreham air crash victims (from clockwise top left) Matthew Grimstone, Graham Mallinson, Tony Brightwell, Mark Reeves, Matt Jones, Maurice Abrahams, Richard Smith, Jacob Schilt, Daniele Polito, Mark Trussler, Dylan Archer
Image:
Shoreham air crash victims (from clockwise top left) Matthew Grimstone, Graham Mallinson, Tony Brightwell, Mark Reeves, Matt Jones, Maurice Abrahams, Richard Smith, Jacob Schilt, Daniele Polito, Mark Trussler, Dylan Archer

Rob Bishton, chief executive at the CAA, said: “Our thoughts remain with the families and friends of those affected by the Shoreham Airshow crash.

“Following the crash, several investigations and safety reviews were carried out to help prevent similar incidents in the future. This included an immediate review of airshow safety and a full investigation by the Air Accidents Investigation Branch. All recommendations and safety improvements from these reviews were fully implemented.

“Airshows continue to be subject to rigorous oversight to ensure the highest possible safety standards are maintained.

“At a previous airshow in 2014 the pilot involved in the Shoreham accident was instructed to abort a display by the show’s flying director. This incident was investigated by the UK Civil Aviation Authority and regulatory action was taken.”

Mr Bishton added: “As part of the work to review the safety oversight of airshows following the tragic Shoreham crash, the actions taken by the regulator following such a stop call were enhanced.”

But the families of those killed still believe much more could be done.

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Liberty Steel’s Speciality Steels UK pushed into compulsory liquidation

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Liberty Steel's Speciality Steels UK pushed into compulsory liquidation

One of the UK’s last remaining steel companies has been pushed into compulsory liquidation – and will fall into government control.

Speciality Steels UK (SSUK), part of the Liberty Steel empire owned by metals tycoon Sanjeev Gupta, employs nearly 1,500 people at sites in Rotherham and several other locations across South Yorkshire.

Behind Tata Steel and British Steel, it is the third-largest steel producer in the country.

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Sky News reported that negotiations had been underway for a deal to rescue the firm, however, they seem to have been rendered unsuccessful.

The government-run Insolvency Service confirmed it will be acting as the liquidator. It added that Teneo Financial Advisory Limited would be assisting in running the company from now on.

While the GFG Alliance, the holding company, says it is disappointed by the decision, local politicians and unions are highly critical of the group.

The government is taking over – but it doesn’t want to own SSUK


Gurpreet Narwan

Gurpreet Narwan

Business and economics correspondent

@gurpreetnarwan

The collapse of Speciality Steel UK (SSUK), the UK’s third-largest steel producer, did not come as a surprise to government officials, who have in recent days been planning for this outcome.

After all, the business has been limping on for some time, weighed down by financial mismanagement and a mounting debt pile. Problems began in 2021 for GFG Alliance – the holding company, which is a conglomerate run by the metals magnate Sanjeev Gupta. Its main lender, Greensill Capital, collapsed with £3.7bn of loans to GFG still outstanding. Administrators for Greensill are still trying to recover the money.

There have been legal claims and probes since then, although GFG denies any wrongdoing. The true scale of SSUK’s financial woes are not even known because the company has not filed audited accounts for more than five years. Sanjeev Gupta is being prosecuted for failing to file accounts for many of his other businesses too.

SSUK’s creditors pushed for the company’s liquidation, but the government was braced to step in. However, the development does little to provide certainty for the business’s 1,500 workers in South Yorkshire.

The government will cover wages and costs for now but, as a letter sent by the Department for Business and Trade made clear earlier this month, the government has no intention to “own SSUK”. As with British Steel, which collapsed back in April (albeit for different reasons), the government is stepping up, but is hoping a new buyer will be found soon.

The government says wages will continue to be paid by the liquidator. A spokesperson adds that the government is still “committed to a bright and sustainable future for steelmaking and steel-making jobs in the UK”.

Financial assistance was not able to be given to SSUK by the government due to its existing financial and corporate challenges, including ownership and management.

Read more
Whitehall on alert for collapse of steel empire
BlackRock backs Gupta’s bid to keep control
Why did British Steel need saving

In a statement today, GFG’s chief transformational officer, Jeffrey Kabel said: “The decision to push Speciality Steel UK into compulsory liquidation, especially when we have support from the world’s largest asset manager to resume operations and facilitate creditor recovery, is irrational.

“The plan that GFG presented to the court would have secured new investment in the UK steel industry, protecting jobs and establishing a sustainable operational platform under a new governance structure with independent oversight.

“Instead, liquidation will now impose prolonged uncertainty and significant costs on UK taxpayers for settlements and related expenses, despite the availability of a commercial solution.

“Liberty has pursued all options to make its SSUK viable, including efficiency improvements, reorganisations, customer support, several attempts to find a buyer for the business and intensive negotiations with creditors to restructure debt liabilities. Liberty’s shareholder has invested nearly £200m, recognising the vital role steel plays in supplying the UK’s strategic defence, aerospace and energy industries.

“GFG will now continue to advance its bid for the business in collaboration with prospective debt and equity partners and will present its plan to the official receiver. GFG continues to believe it has the ideas, management expertise and commitment to lead SSUK into the future and attract major investment. GFG’s other significant business interests in the UK remain unaffected.

“Despite many challenges facing the group and the difficult market conditions, GFG has invested over £2bn into the UK economy since 2013, ensuring the survival of many GFG businesses despite operating losses and safeguarding thousands of jobs that would otherwise have been lost.”

Sanjeev Gupta in front of a the Liberty Steel Group sign. File pic: PA
Image:
Sanjeev Gupta in front of a the Liberty Steel Group sign. File pic: PA

Sarah Champion, the Labour MP for Rotherham, said GFG’s statement was “full of hollow promises”.

She added: “We know Liberty is a golden goose, but one they have starved for years.

“The speciality steel we make is unique and in high demand, it makes no financial sense that GFG furloughed the plant for nearly two years.

“Strategically, the government cannot allow Liberty Steel to fail. I am confident they will do all in their power to let it flourish.”

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Charlotte Brumpton-Childs, the national officer for the GMB union, also attacked GFG.

She said: “This is another tragedy for UK steel – and the people of South Yorkshire – this time brought on by years of chronic mismanagement by the owners.

“But this represents an opportunity for the UK government to take decisive action – as it did with British Steel – to protect this vital UK industry.”

A government spokesperson said: “We know this will be a deeply worrying time for staff and their families, but we remain committed to a bright and sustainable future for steelmaking and steel-making jobs in the UK.

“It is now for the independent Official Receiver to carry out their duties as liquidator, including ensuring employees are paid, while we also make sure staff and local communities are supported.”

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