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October 15, 2020 at 10:23 AM
A Wells Fargo branch office in New York (Photo: Bloomberg)
Wells Fargo & Co. fired more than 100 employees suspected of improperly collecting coronavirus relief funds, according to a person with knowledge of the situation.
The firm determined that the staffers defrauded the Small Business Administration “by making false representations in applying for coronavirus relief funds for themselves,” according to an internal memo reviewed by Bloomberg. The review focused on employees who tapped the Economic Injury Disaster Loan program, a key part of the government’s effort to prop up businesses during the pandemic.
“We have terminated the employment of those individuals and will cooperate fully with law enforcement,” David Galloreese, Wells Fargo’s head of human resources, said in the memo. “These wrongful actions were personal actions, and do not involve our customers.”
While it’s possible for employees at large companies to legitimately tap U.S. aid for businesses they operate on the side, Wells Fargo’s findings add to evidence the program was widely abused — with little sign such activity was limited to bankers. Unlike other employers, banks can check whether staff had aid deposited into their accounts. An earlier review by JPMorgan Chase & Co. found that more than 500 employees tapped the EIDL program, and that dozens did so improperly.
The SBA urged banks to look out for suspicious deposits from the program to their customers and even their own staff. While the program offers loans to businesses, much of the concern has focused on its advances of as much as $10,000 that don’t have to be repaid. A Bloomberg Businessweek analysis of SBA data in August identified at least $1.3 billion in suspicious payments.
