Frank founder Charlie Javice jury can't hear what she thought of Theranos fraudster Elizabeth Holmes: judge

• The feds say Javice tricked JPMorgan Chase into paying $175M for her financial aid startup, Frank.
• On Tuesday, a Manhattan judge set parameters for a February 18 criminal trial.
• No one can mention Theranos fraudster Elizabeth Holmes, he ruled — unless Javice opens the door.

Charlie Javice — the young tech entrepreneur accused of tricking the nation's largest bank into paying $175 million for her college financial-aid startup — once had a lot to say about Theranos fraudster Elizabeth Holmes.

Javice called Holmes' defrauded investors "sophisticated assholes," and complained that "investors should be blamed," according to a pair of WhatsApp messages that were discussed at a pretrial hearing in Manhattan on Tuesday.

When Javice and her ex-number two at their startup, Frank, go on trial for allegedly defrauding JPMorgan Chase later this month, federal prosecutors will be barred from making any mention of Theranos or Holmes, a judge ruled during the hearing.

And those WhatsApp messages between Javice and codefendant Olivier Amar, in particular, are definitely not coming into evidence, he said, unless either defendant opens the door by mentioning them on the witness stand.

"The potential for prejudice outweighs anything probative," US District Judge Alvin K. Hellerstein said in precluding the use of the two messages that prosecutors had optimistically labeled "Government Exhibit 802."

The two WhatsApp messages are from 2022, "in the midst of their own efforts to defraud JPMC," the government alleged in court papers last week, in asking the judge to allow the "highly probative" texts into evidence at a trial scheduled to begin February 18.

Federal prosecutors allege that over months of negotiations, Javice and Amar repeatedly lied to Chase about the success of Frank, a for-profit tech company that Javice launched at age 24 and which featured software to help students apply for college financial aid.

Javice fraudulently claimed that Fank had 4.5 million customers, prosecutors allege, and created fake spreadsheets to trick the bank into believing they existed. She personally stood to gain $45 million in stock and salary from the deal, according to prosecutors.

"The government seeks only to offer the defendants' own statements about the defendants' own contemporaneous views about Holmes' criminal conduct, while in the midst of concealing the defendants' own criminal conspiracy," federal prosecutors wrote in asking last week for the judge's permission to use the WhatsApp messages as trial evidence.

In the messages, Javice and Amar are "calling the conviction 'dangerous,' and repeating many of the defenses they intend in their own case," prosecutors wrote.

That includes what prosecutors call a blame-the-victim defense.

"Investors should be blamed on letting a 19-year-old go rogue," Javice commiserated with Amar in the messages, referring to Holmes, who founded Theranos at age 19.

Perhaps most damagingly, the texts appear to show Javice drawing a distinction between a health-based fraud, like the one Holmes was convicted of, and a fraud based on financial aid.

"I think health is different," Javice tells her number two in the first of the two contested, and now stricken, WhatsApp messages.

"They talk about how she was unfairly treated," Assistant US Attorney Georgia V. Kostopoulos told the judge Tuesday, in her failed argument for admitting the messages.

"They say health is different" the prosecutor told the judge. "They're saying that it's different to lie about patients' health data than it is to lie about student data."

In their own court filings, defense lawyers for Javice and Amar had asked the judge to bar any mention at trial of "well-known, unrelated third parties convicted of fraud, specifically Elizabeth Holmes, Bernie Madoff, Sam Bankman-Fried, and Martim Skreli, which the government has signaled it intends to introduce in its case-in-chief."

Federal prosecutors say they have no intention of mentioning any of these infamous fradusters at trial.

Javice, who was once on Forbes' 30 Under 30 list, recently lost a bid to be tried separately from Amar. It was revealed at a court hearing last month that Amar plans to go on the offensive against Javice during the trial.

Both Javice and Amar have pleaded not guilty to charges of conspiracy to commit securities, wire, and bank fraud.