During September of 2016, the scandal broke about Wells Fargo’s millions of bogus accounts being created without their customers’ knowledge and/ or without their prior approval. The news exposed the high-pressure sales tactics that caused internal chaos, and eventually forced the San Francisco-based bank to settle allegations that quota-chasing employees created more than 2 million fake bank and credit card accounts. Wells Fargo says it fired offending 5,300 employees as well as ending cross-selling and sales goals at call centers.
Following the scandal becoming public, the CEO and Chairman of Wells Fargo, John Stumpf withstood hours of bipartisan grilling before the Senate and the House’s Banking Committees to where it became clear that this troubling case of fake accounts being opened was not going to be easily dismissed. Recently, Mr. Stumpf submitted his intent to retire, immediately.
After the Los Angeles city attorney’s office and federal bank regulators announced a $185-million settlement with Wells Fargo over the creation of the bogus accounts, lawmakers have been questioning whether the bank may have violated fraud, labor and securities laws.
It looks like the California Department of Justice is stepping up to the plate to pursue criminal charges against Wells Fargo.
“U.S. attorneys in San Francisco, New York and Charlotte, N.C., are working on their own investigations, though the status of those inquiries is not clear.”
Now, on 10/19/16 the LA Times announced breaking news in their report, “California attorney general investigating Wells Fargo for criminal identity theft.” James Rufus Koren writes:
“The California Department of Justice is investigating Wells Fargo on allegations of criminal identity theft over its creation of millions of unauthorized accounts, according to a search warrant sent to the bank’s San Francisco headquarters this month.”
“The warrant and related documents, served Oct. 5 and obtained by The Times through a public records request, confirm that California Atty. Gen. Kamala Harris, in the final weeks of a run for U.S. Senate has joined the growing list of public officials and agencies investigating the bank in connection with the accounts scandal.”
“Harris’ office demanded the bank turn over a trove of information, including the identities of California customers who had unauthorized accounts opened in their names, information about fees related to those accounts, the names of the Wells Fargo employees who opened the accounts, the names of those employees’ managers and emails or other communication related to those accounts.”
“Her office is also requesting the same information about accounts opened by Wells Fargo workers in California for customers in other states. Documents filed along with the search warrant say there is probable cause to believe Wells Fargo violated two sections of the state penal code — one outlawing certain types of impersonation, the other outlawing the unauthorized use of personal information. Both violations can be charged as felonies, punishable by imprisonment for more than a year.”
“It’s not clear whether Harris’ office is considering charges against individual bank workers, high-level bank executives or the bank itself. The investigation could lead to charges beyond the identity-theft allegations used to secure the search warrant.”
“Harris has made her crackdown on wrongdoing in the financial services industry one of the themes of her campaign. She has especially pointed to her role in negotiating $20 billion in relief from banks for California homeowners who lost homes or suffered losses in the housing bust. But that deal failed to live up to promises she had made to send those responsible to jail, opening her up to some criticism.By investigating Wells Fargo, Harris could be trying to burnish her bank-busting credentials, said Jack Pitney, a professor of politics at Claremont McKenna College.”