Ex-Wells Fargo CEO deserves jail time for C…

bloomberg— The US Attorney’s Office said the former head of retail banking at Wells Fargo & Co. He will face up to a year in prison for obstructing the bank’s practice of opening millions of accounts for customers without their permission.

Carey L. Tolstedt, the bank’s only CEO charged with crimes stemming from the 2016 fake accounts scandal, This year he agreed to plead guilty to obstructing the investigation. Now the judge handling the case must decide how severely to punish her. The US Attorney’s Office in Los Angeles ruled late Friday.

Prosecutors said in a lawsuit that Tolstedt “tried to hide from regulators one of the biggest banking scandals in modern history.” “A clear message must be sent to wrongdoing firms that maintaining a profitable position through criminal behavior is not worth the risk.”

Wells Fargo paid $3 billion in fines in 2020 for its pervasive practices Opening current and credit accounts without the client’s permission to achieve aggressive sales targets. The bank said it discovered that its employees may have created 3.5 million fake accounts.

Wells Fargo has also been involved in other disputes with consumers over junk auto insurance, home loans, and overdraft fees. He promised to improve after the scandals.

Prosecutors said the US probation office’s recommendation that Tolstedt serve a three-year probation sentence did not reflect the seriousness of his crime.

Eno Mainegi, Tolstedt’s attorney, did not immediately respond to an after-hours email seeking comment. The attorney will have the opportunity to present an alternative to the prosecutors’ proposal.

Prosecutors said Tolstedt obstructed the examination by the Office of the Comptroller of the Currency by not disclosing statistics on the number of employees who have been fired or quit pending an investigation into misconduct in sales practices. Nor did it disclose that the bank proactively investigated only a very small percentage of employees who engaged in activities that were classified as improper sales practices, according to the government.

In his guilty plea, Tolstedt agreed to be banned from banking and to pay a civil fine of $17 million to OCC. Under the agreement he signed, he faces up to 16 months in prison.

Read more at Bloomberg.com