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When bad things happen to rich people


But to take another pro, who knows you, and has his eye on you, that’s a score:

Step 1: Scream from the rooftops that the American college system is broken! That students graduate with $30,000 in student loans.

Step 2: Start a fintech business to fix this problem. Target Gen-Z college students and help them fill out arduous forms to get scholarships and financial aid.

Step 3: Get on the celebrated Forbes 30 Under 30 list for fighting for a worthwhile cause. People will notice you now.

Step 4: Attract the attention of a bank that’d love to get its hands on your user list. After all, your college-going user list is the perfect future customer for a bank. Catch ’em when they’re young.

Step 5: Finally, and this is the most important step of them all — If you don’t have the 4.25 million users to ask for a $175 million buyout, just fake the customer data!!! Yup, do whatever it takes to fool the bank into believing that the startup was a phenomenal success. And keep your fingers crossed.

Or as the tech bros say, “Fake it till you make it.”

You know what we could really use here? A professor who will engage in a massive financial fraud in exchange for $18,000 in “consulting fees.”

Meanwhile, Javice was cooking up something too. She’d found a “Data Science Professor.” A teacher at a college in New York City. And wanted his help to create fake lists.

And that’s when it becomes really scandalous!

So, Javice asked the Professor to generate addresses for the fake students. And the Data Science Professor emailed Javice asking, “I can’t seem to find addresses in my raw files . . . Should I attempt to fabricate them?”

Javice responded saying, “I just wouldn’t want the street to not exist in the state.” Basically, the addresses could be fake. But she didn’t want a non-existent XYZ street name to pop up. It had to be real.

But the Professor replied that “‘real addresses’ may not be doable.”

So Javice had a brainwave. She figured out that, “[I]f we can’t do real addresses whats the best we can do for that? Worse comes to wors[t] we can try a unique ID.”

Basically, she fooled JPMorgan by convincing them that the Unique ID in the list was to protect the confidentiality of the student users. That the Unique ID was tied to real addresses in the back end. And the bank believed her.

Then came the email IDs. And this is even juicier.

Here’s an excerpt from JPMC’s complaint.

In an email at 12:56 p.m., the Data Science Professor, referring to the template Javice sent an hour earlier, asked Javice: “You have the student email marked as ‘provided as unique ID’ but didn’t we agree to make fake ones a la ‘[email protected]’? Or do you want unique ID after all?”

In a response sent six minutes later at 1:02 p.m., Javice asked, “will the fake emails look real with an eye check or better to use unique ID?”

At 1:37 p.m., the Data Science Professor confirmed “[t]hey will look fake. So let’s use unique ID.”

So yeah, the Unique IDs emerged again. All under the veil of ‘privacy.’

It all seemed so genuine. So when JPMC did the due diligence, it passed with flying colours.

And finally, there’s the scam invoicing bit after the deed was done.

When the Professor sent Javice a bill of $13,300 for the work done, he was quite elaborate. He described that he’d performed “college major generation” that included creating “first names, last names, emails, phone numbers”.

Quite an honest man!

But Javice freaked out. A sharp auditor would definitely ask questions about this.

So she asked him to remove it all. And simply send a one-line invoice saying “for data analysis.” She even sent him a bonus of $4,700. Probably to keep his mouth shut.

And the Professor’s response was: “Wow. Thank you. Here is the new invoice.” Yeah, the fraud didn’t really matter anymore.

But Javice sweetened the deal further. She even offered the Professor a full-time position at JPMC after the buyout. Now hiring the man into the same bank he helped defraud is quite the killer move!

Pretty sure the moral of this story, the moral of this song, is never turn too cheap a trick where one does not belong.

Lately I’ve been thinking about how people get away with transparently obvious scams for so long in this crazy mixed up world of ours. Along with getting paid $175 million by one of the world’s leading banks to provide them with four million fake email addresses we have Mr. George Santos, whose utterly fraudulent back stories were fairly fully exposed by a local Long Island newspaper months before the election that put him in Congress — an election where every single contestable seat was crucial to which party would hold the majority in the new legislature.

There’s also a new Netflix series about Bernie Madoff that I’ve started to watch, which reminded me that Harry Markopolous spent an entire decade laying out Madoff’s remarkably unsophisticated fraud — it was the simplest Ponzi scheme imaginable — to the SEC in very plain English, and they never did a thing about it (Madoff confessed to his sons, who then went to the feds).

There are days when this whole country feels like a combination of Ivy League carnival barkers and red state religious lunatics, dealing in dirt, and stealing in the name of the Lord.

. . . as Unemployed Northeastern lays out in comments, Javice is a trust fund nepo baby who made up an elaborate fake backstory about her own struggles with college financial aid, which a bunch of people who have never taken out a student loan in their lives bit on because of a combination of ignorance and class solidarity:

The key detail is omitted: Javice herself is the product of an elite education (well, Penn) and a wealthy background (father is a hedge fund manager). This is what let her mingle (or claim to mingle) with movers and shakers when she was in college. This is what let her even have a meeting with JP Morgan Chase. Lest there be any doubt, if there were a real Frank with 4+ million consumers but it was operated by a kid from Penn State who grew up in Scranton as the child of mill workers, JP Morgan wouldn’t deign sully their hands talking to them. Fact.

This should be seen as kith and kin with Theranos: young, ambitious product of elite education risibly claims the moon but investors fall for it because once you are in the club, due diligence doesn’t really matter all that much. What matters is that you’ve coded in, educationally, socially, and culturally with the monied class. In fact, it’s similar to how, if you can get into a Penn or Stanford or Harvard, you are all but guaranteed a 3.6 or better even if you do no work: you’re in the club now, and the club will work overtime to make you successful, for that is the point of the club: elevation for members, stratification for everyone else.

EDIT: chef’s kiss: she was once selected for a Thiel Fellowship (but turned it down).

EDIT 2: additional chef’s kiss: her lawyer is Alex Spiro, who also represents Melon Husk in some (most? all?) matters.

“In 2017, Javice launched Frank with a new focus on improving the student loan application process and making college more affordable…. “There aren’t many good actors in the space, and we just wanted to stand for something that was honest, that was transparent, and where people can really feel as if they have someone who’s got their back,” she said in a 2017 YouTube interview with marketer Bill Carmody. “Frank kind of represented that as a name, because it just meant ‘honest.’” Her ambitions to build the startup into “an Amazon for higher education” or “TurboTax but for financial aid” won her backing from billionaire Apollo CEO Marc Rowan, a lead Frank investor, U.S.-Israeli fund Aleph and other venture firms.”

Now I’m seeing another reason why everyone fell for it: her sales pitch to VC firms that acquiring student loans is difficult is brilliant because 0.01% of VC partners have ever used student loans. Virtually all VC partners are the products of elite education who were culturally screened in the interview process for IB and VC for positive traits like ‘comfortable around wealth’ and ‘excels in upper crust Olympic sports like rowing and equestrian. Kellog professor Lauren Rivera’s book “Pedigree” explains this in great depth. So these people have no direct knowledge of the student lending process because they are centimillionaires who grew up in Greenwich and Atherton, but they have heard that student loans are a problem so surely the access and servicing of them must be part of it. Except… the student loan process is done through a government form (FAFSA) and your college’s student aid office, who will eagerly help you give them money, and the servicing of federal student loans is through a government portal. There’s no need or room for a third party here. Private student loans could be improved, but private student lenders have no reason or initiative to let a third party barge into the middle of their debt peonage relationship with their customers. So the entire Frank idea was complete vaporware, as far as I can see.

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