California prosecutors are investigating whether Wells Fargo & Co. (WFC) bankers committed criminal identity theft by creating millions of fraudulent accounts.
Attorney General Kamala Harris served a search warrant on the bank seeking the names of employees who opened unauthorized accounts from May 2011 to July 2015. The warrant, provided by Harris, also demands detailed communications, the bank’s fee structure and a calculation of losses suffered by affected customers.
Harris’s office said a probe by Los Angeles officials revealed state penal code violations for impersonation and unauthorized use of personal information for checking and savings accounts and also for lines of credit, credit cards, mortgages and wealth management accounts, according to a filing attached to the Oct. 5 search warrant.
The investigation by Harris, a Democrat running for the U.S. Senate, adds to the mountain of scrutiny facing Wells Fargo, which on Sept. 8 agreed to pay $185 million to settle claims that employees may have opened more than 2 million bogus customer accounts to boost sales tallies. Congressional hearings followed and Chief Executive Officer John Stumpf stepped down last week. The San Francisco-based bank faces at least a dozen lawsuits by customers, investors and former employees.
Federal prosecutors in New York and San Francisco also have opened criminal probes of the bank, a person familiar with the matter has said. Under Justice Department guidelines, investigators will be looking into both potential corporate and individual wrongdoing, the person said.
It’s unusual for companies of Wells Fargo’s stature and size to be investigated for criminal identity theft, though typical that the search warrants target bank records, said William Portanova, a former federal prosecutor.
“Using someone else’s identity to open a bank account is a crime, period,” Portanova said. “It’s a violation of the California penal code. It is punishable by jail. It can be a misdemeanor or felony.”
He added, “It’s a good sign for the future of white-collar investigations, because frankly a lot of large scale organizations have been not only too big to fail but apparently been too big to be investigated.”
The state’s identity theft claims further the notion that Wells Fargo employees knowingly defrauded customers. In the affidavit requesting the search warrant, James Hirt, a special agent supervisor for California’s Justice Department, cites interviews with four customers claiming Wells Fargo “unlawfully accessed the bank’s computer system to obtain” their personal information.