Wells Fargo fires 100 employees for misrepresenting themselves to access Covid-19 relief funds
In a memo to some staff Wednesday, which was obtained by CNN Business, Wells Fargo (WFC) human resources head David Galloreese wrote that the bank identified employees whom it believes may have “defrauded the U.S. Small Business Administration (SBA) by making false representations in applying for coronavirus relief funds for themselves through the Economic Injury Disaster Loan program, which is administered directly through the SBA.”
Between 100 and 125 Wells Fargo employees were fired as a result, and an internal investigation is ongoing, a person familiar with the situation told CNN Business.
The memo was reported earlier by Bloomberg News.
Wells Fargo isn’t the first to have concerns about the misuse of government stimulus funds intended to help small businesses suffering from the fallout of the coronavirus pandemic. JPMorgan (JPM) said in September it was investigating the role employees may have played in potential abuse of Paycheck Protection Program loans and other pandemic relief programs. And several individuals have been charged with bank fraud for allegedly misusing such funds.
It’s also the latest in a series of issues at Wells Fargo, which also include profitability challenges as the bank continues to deal with expenses linked to refunds for customers harmed by what the Federal Reserve has called “widespread consumer abuses.”
Galloreese noted in the memo that the employees’ actions announced Wednesday were taken outside of the employees’ work responsibilities and did not involve customers.
“We have zero tolerance for fraudulent behavior and will continue to look into these matters,” Galloreese said in the Wednesday memo. “If we identify additional wrongdoing by employees, we will take appropriate action.”
He added that the company will fully cooperate with law enforcement.
“As a company, we are vigilant in detecting fraud,” he said. “While these instances of wrongdoing are extremely unfortunate and disappointing, they are not representative of the high integrity of the vast majority of Wells Fargo employees.”