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Former Wells Fargo executive pleaded guilty to involvement in banking scandal

Former Wells Fargo executive pleaded guilty to involvement in banking scandal

A former Wells Fargo Bank executive accused of overseeing a ruse that created millions of fake customer accounts has agreed to plead guilty to criminal charges that could land her in prison for her role in the scandal.

The deal, filed Wednesday in a Los Angeles federal court, calls for former Wells Fargo executive Carrie Tolstedt to serve a 16-month prison sentence for obstructing a regulators investigation into abuse of sales that culminated in the bank paying billions of dollars in fines. Tolstedt, 63, also agreed to pay a $17 million fine in a separate civil settlement with the government, which also barred her from working in the banking industry again.

Prosecutors are requesting a court hearing on April 7 to review the settlement.

Tolstedt was the longtime head of Wells Fargo’s extensive network of retail branches before leaving in 2016 just before evidence of abusive sales tactics of the bank emerged. After previously denying any wrongdoing, Tolstedt becomes the first Wells Fargo executive to be prosecuted for a scandal that saw 5,300 employees fired for falsifying bank details and other ethics violations.

San Francisco-based Wells Fargo previously admitted its ambitious sales targets fostered a culture that drove branch employees to open millions of unauthorized and fraudulent accounts between 2002 and 2016. The U.S. Justice Department charged Tolstedt, now a resident of Scottsdale, Arizona. — knew about the abuses dating back to 2004, then tried to cover up the misconduct in a memo prepared for regulators investigating the practices in 2015.

“Obstructing the investigation jeopardizes the mission of those who seek the truth, and we will hold accountable anyone who tries to cover up wrongdoing.” said Acting United States Attorney Joseph T. McNally.


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