JPMorgan & Co. stated that Charlie Javice’s “unconscionable” $74 million legal fee bill included over $5 million in charges for lawyers and other staff simply for attending her fraud trial, even on days when court wasn’t in session.
A previously sealed Delaware court document released on Monday provided the most detailed account to date of JPMorgan’s assertion that Javice, who was convicted in March of defrauding the largest U.S. bank in a $175 million deal, exploited an agreement requiring the bank to cover her defense costs.
JPMorgan is aiming to avoid $10.2 million in disputed charges and terminate the obligation to pay future bills. According to the filing, lawyers at Javice’s five law firms charged for unnecessary work and inappropriate expenses under the mentality that “someone else is footing her bills.”
The dispute has raised questions about what constitutes excessive cost for a top-tier criminal defense. Javice’s legal expenses have far exceeded the $30 million in bills Theranos Inc. founder Elizabeth Holmes accumulated for her defense.
The bank directed much of its criticism at Javice’s two largest firms, Quinn Emanuel Urquhart & Sullivan and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, which it said “have already received tens of millions and are seeking millions more for patently unreasonable fees and expenses that clearly amount to abuse.”
JPMorgan noted it has “largely resolved” bills through July with Javice’s other firms, including the one handling her planned appeal.
In a statement, a Quinn Emanuel spokesman said, “JPMorgan is attempting to renege on its contractual duty to pay the remaining portion of Ms. Javice’s legal bills—all in an effort to block her right to pursue her meritorious appeal.” Mintz did not immediately respond to phone calls and emails requesting comment.
By August 2024, the two large firms had already billed more than $22 million in the criminal case when Javice hired two smaller firms to defend her in the upcoming trial, offering “no explanation” for why Quinn Emanuel and Mintz Levin could not serve as lead trial counsel.
JPMorgan argued that Quinn Emanuel’s fees “skyrocketed” after informing the court before trial that it expected to transition its responsibilities to Mintz. The bank also stated that Mintz Levin lawyers were “peripheral and unnecessary, even during trial.”
JPMorgan reported that Javice had between 16 to 29 lawyers and other legal professionals in court each day of her trial, billing an average of $360,000 daily over the six-week trial period. The bank noted that no more than four lawyers had speaking roles, and many charges were for “trial attendance alone.” “Javice’s counsel even improperly billed for trial ‘attendance’ on non-trial days,” JPMorgan added.
According to the bank, lawyers attending the trial submitted a number of inappropriate expenses. Included in 2,377 pages of receipts filed for March were a Cookie Monster toddler toy, lavender and jasmine sachets, 57 hotel room upgrades at $300 per night, and a $900 meal at a highly rated New York restaurant, JPMorgan said.
A New York jury found Javice guilty of misleading JPMorgan into acquiring her student-finance startup, Frank, by creating millions of fake users for the platform. She was sentenced in September to seven years in prison but remains free on bail pending her appeal.
As part of her sentence, Javice was ordered to repay the legal fees JPMorgan covered. However, even if the order is upheld, the bank is unlikely to recoup more than a small fraction of the total amount. Javice is only required to pay 10% of her income in restitution after leaving prison, and the order expires in 20 years.
The case is Javice v. JPMorgan, 2022-1179, Delaware Chancery Court (Wilmington).