Federal prosecutors said Friday that the former head of Wells Fargo’s retail banking division must serve a one-year prison sentence for “obstructing a bank audit.”
They also called for “one year of supervised release” following the sentencing of Carrie Tolstedt, who pleaded guilty to the charges earlier this year. She was the only bank executive to be charged in the 2016 fake accounts scandal.
Tolstedt “attempted to hide one of the largest banking scandals in modern history from regulators,” the court filing said. “A clear message must be sent to economic perpetrators that securing a lucrative position through criminal behavior is not worth the risk.”
Wells Fargo was forced to pay $3 billion in penalties in 2020 for opening checking and credit card accounts without customers’ authorization – an attempt to hit revenue targets, Bloomberg reported. The bank reportedly said it found over 3.5 million fake accounts.
“As the leader of the community bank, the defendant was best equipped to help [Comptroller] in resolving the problems at Wells Fargo,” prosecutors wrote in Friday’s filing. “Instead, she prepared a memo that she knew the bank would provide [Comptroller] and important information corruptly withheld.”
“Specifically, it withheld data on the number of employees who were terminated or terminated pending an investigation into sales-related misconduct and the fact that of the many employees identified by the bank’s own metrics for potential sales-related misconduct were pointed out, only a small portion of which was withheld. “Percent were investigated,” the file says.
In her plea, Tolstedt agreed to be banned from working in the banking sector and to pay a $17 million civil penalty. She also faces a 16-month prison sentence.
The former bank manager settled on the charges she faced in May from the Securities and Exchange Committee (SEC) as part of the same scandal.
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