Former Wells Fargo executive to plead guilty to charge in sales scandal

WASHINGTON — The former Wells Fargo retail banking executive faces jail time after agreeing to plead guilty to obstructing a bank review in connection with the fake account scandal that rocked the bank in 2016.

Carrie Tolstedt, 63, faces up to 16 months in prison under a plea deal with federal prosecutors filed Wednesday. The development marks a rare case of a senior bank executive facing jail time as a result of his work.

Tolstedt has agreed to plead guilty to one count of obstructing a bank review and is expected to appear in Los Angeles court for the first time in the coming weeks, the Los Angeles U.S. Attorney’s Office said in a statement. .

She also faces a $17 million civil fine announced separately by the Office of the Comptroller of the Currency, which said Tolstedt was “largely responsible” for widespread sales abuse at the bank, where potentially millions of accounts have been stolen. been opened without customer approval.

A lawyer for Tolstedt, who led the bank’s personal and small business loans from 2007 to 2016, declined to comment. Reuters previously reported that prosecutors were targeting Tolstedt.

Wells Fargo paid $3 billion in February 2020 to settle federal civil and criminal investigations, admitting at the time to pressuring employees between 2002 and 2016 to meet unrealistic sales goals, which caused them driven to open fake accounts for customers.

A Wells Fargo spokesperson declined to comment.

No criminal charges against individuals were announced at the time, although in 2020 the OCC filed civil lawsuits against Tolstedt and several other former senior bank executives and excluded its former CEO, John Stumpf, of the banking sector. Tolstedt is also now barred from the industry. The penalty announced Wednesday resolves those charges.

“The judiciary and regulators rely on companies and their executives to cooperate fully when investigating potential wrongdoing. But, in this case, Ms. Tolstedt took steps to conceal wrongdoing at Wells Fargo,” Joseph McNally, acting U.S. attorney for the Central District of California, said in a statement.

Some said the development didn’t go far enough.

“Finally, decades after the biggest fraud in American history, a banker is going to jail,” said Bartlett Naylor, financial policy advocate at Public Citizen in Washington. “But Tolstedt did not act alone; she had bosses. They must also face real justice.

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