For her part in the scandal, a former Wells Fargo Bank executive who is suspected of supervising a scheme that resulted in the creation of millions of fictitious client accounts has agreed to plead guilty to criminal charges that are likely to land her in jail.
According to the settlement document submitted on Wednesday in a federal court in Los Angeles, Carrie Tolstedt, a former executive of Wells Fargo, will serve a 16-month prison term for obstructing regulators’ investigation into the bank’s abusive sales practises, which led to the bank being fined billions of dollars. In a separate civil settlement with the authorities, Tolstedt, 63, also consented to pay a $17 million fine and was also prohibited from working in the banking sector in the future.
In order to assess the plea deal, the prosecution is asking for a court hearing on April 7.
Until resigning in 2016 shortly before evidence of the bank’s deceptive sales practises came to light, Tolstedt had been the division’s leader for Wells Fargo’s vast network of retail branches. Tolstedt is the first Wells Fargo executive to be found criminally responsible for a scandal that led to the termination of 5,300 workers for fabricating bank records and other ethical infractions after earlier denying any wrongdoing.
Wells Fargo, a San Francisco-based company, recently acknowledged that from 2002 to 2016, its branch employees were encouraged to open millions of unauthorised and fraudulent accounts as a result of its lofty sales goals. In a report written for regulators looking into the procedures in 2015, the U.S. Justice Department claimed that Tolstedt, who is now a resident of Scottsdale, Arizona, knew about the abuses dating back to 2004 and then attempted to cover up the misbehaviour.
“We will hold accountable anyone who attempts to conceal wrongdoing, as doing so contradicts the mission of those seeking the truth.” said Joseph T. McNally, acting US Attorney.
