Wells Fargo fires workers for allegedly defrauding feds in pandemic loan applications

Wells Fargo has fired as many as 125 workers for allegedly defrauding the Small Business Administration in applications to a pandemic relief loan program.

A bank investigation found that some workers had made false representations in applications for relief funds through the Economic Injury Disaster Loan program run by the SBA. The funds were sought for the workers personally, and not related to their official duties at the bank, according to the bank.

“If we identify additional wrongdoing by employees, we will take appropriate action,” said David Galloreese, Wells Fargo’s human resources head, in an internal memo seen by the Observer Wednesday.

“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,” Galloreese said.

The bank says it is cooperating with law enforcement.

Between 100 and 125 workers were fired, Bloomberg reported, citing a confidential source. Bloomberg was first to report the firings.

The program gives loans directly to business owners suffering revenue losses due to the coronavirus pandemic. The program, as well as many other federal and state stimulus programs, has been the target of fraudsters.

The bank is not the first to run into problems with its employees and stimulus programs. Over 500 JPMorgan Chase employees got virus relief funds, including dozens who should not have, Bloomberg reported in September.

Wells Fargo employs 27,000 people in Charlotte, a legacy of the bank’s 2008 purchase of Wachovia. Also on Wednesday, the bank reported third quarter earnings. The $2 billion in profit it posted disappointed investors who continue to be bothered by the bank’s expenses, and shares fell 6%.

This story was originally published October 14, 2020 at 9:03 PM with the headline "Wells Fargo fires workers for allegedly defrauding feds in pandemic loan applications."