Wells Fargo Fires Employees Who Applied for SBA Pandemic Loans
October 14 2020 - 6:41PM
Dow Jones News
By Ben Eisen
Wells Fargo & Co. fired more than 100 employees for
allegedly defrauding a federal pandemic-relief program.
A bank internal investigation found that as many as 125
employees made false representations in applying for a type of
small-business relief program called an Economic Injury Disaster
Loan, a person familiar with the matter said.
"We have terminated the employment of those individuals and will
cooperate fully with law enforcement," said David Galloreese, the
bank's head of human resources, in an internal memo. "These
wrongful actions were personal actions, and do not involve our
customers."
The Small Business Administration program has been providing
these loans directly to business owners who lost revenue due to the
pandemic. The SBA inspector general said in July that it had been
barraged with complaints about fraud.
Financial institutions play no role in approving or disbursing
the loans but monitor them when deposited into customers' accounts
by the SBA. Nine of them reported almost $200 million in suspicious
transactions, according to the inspector general's report.
The Wells Fargo firings, first reported by Bloomberg News,
follow an earlier disclosure by JPMorgan Chase & Co. that it
was investigating potential wrongdoing involving another
small-business relief effort, the Paycheck Protection Program.
Write to Ben Eisen at ben.eisen@wsj.com
(END) Dow Jones Newswires
October 14, 2020 19:26 ET (23:26 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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