Federal prosecutors said Friday that the former head of Wells Fargo’s retail banking division should serve a year in prison for “obstructing a banking exam.”
He also requested “one year of supervised release” following the sentencing of Carrie Tolstead, who accepted the charge earlier this year. She was the only executive of the bank to be charged in the fake account scam of 2016.
In a court filing, prosecutors said Tolstedt “attempted to hide from regulators one of the biggest banking scams in modern history.” “A clear message must be sent to corporate wrongdoers that maintaining a lucrative position through criminal behavior is not worth the risk.”
Bloomberg reported that Wells Fargo had to pay a $3 billion fine in 2020 for opening checking and credit card accounts without customers’ authorization – an effort to meet sales targets. As per the report, the bank said that it has found over 35 lakh fake accounts.
“As head of the community bank, defendant was best equipped to assist [Comptroller] rooting out problems at Wells Fargo,” prosecutors wrote in Friday’s filing. “Instead, he prepared a memo that he knew the bank would provide [Comptroller] And key information was corruptly concealed.
“Specifically, it withheld data on the number of employees fired or resigned pending investigation for sales-related misconduct, and the fact that, by the bank’s own metrics for potential sales-related misconduct Of the many employees who were flagged, only a small percentage were screened,” the filing reads.
In his plea, Tolstedt agreed to serve a ban on working in the banking industry and pay a civil fine of $17 million. He also faces a jail term of 16 months.
The former banking executive settled charges against him from the Securities and Exchange Committee (SEC) in May as part of the same scandal.
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