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September 05, 2023 at 01:48 PM
Wells Fargo & Co.’s former head of retail banking should spend a year in prison for impeding a probe of the bank’s practice of opening millions of accounts for customers without their authorization, prosecutors said.
Carrie L. Tolstedt, the only executive at the bank to be accused of criminal wrongdoing stemming from its fake-accounts scandal of 2016, agreed this year to plead guilty to obstructing the investigation. Now the judge handling the case must decide how severely she should be punished. The U.S. Attorney’s Office in Los Angeles weighed in late Friday.
Tolstedt “attempted to conceal from regulators one of the biggest banking scandals in modern history,” prosecutors said in a court filing. “Corporate wrongdoers must be sent a clear message that maintaining a lucrative position through criminal behavior is not worth the risk.”
Wells Fargo paid $3 billion in penalties in 2020 over its widespread practice of opening checking and credit accounts without customers’ authorization to meet aggressive sales goals. The bank said it found employees may have created 3.5 million bogus accounts.
Wells Fargo has also been embroiled in other consumer spats over unwanted car insurance, mortgage lending and overdraft fees. It promised to improve in the wake of the scandals.
A recommendation by the U.S. Probation Office that Tolstedt serve a three-year term of probation doesn’t reflect the seriousness of her crime, the U.S. Attorney’s Office argued.
