A former Wells Fargo The bank executive accused of overseeing a scam that created millions of fake customer accounts has agreed to plead guilty to criminal charges that could have sent him to prison for his role in the scandal.
The agreement filed Wednesday in a federal court in Los Angeles calls for the former Wells Fargo executive, Carrie Tolstedt, who will serve a 16-month prison sentence for obstructing regulators’ investigation into abusive trading practices that ended up at the bank pay billions of dollars in fines. Tolstedt, 63, also agreed to pay a $17 million fine in a separate civil settlement with the government that also barred him from ever working in the banking industry again.
Prosecutors requested an April 7 court hearing to review the plea agreement.
Tolstedt was Wells Fargo’s longtime division head responsible for a large network of retail branches, before leaving in 2016 before evidence of abusive bank sales tactics emerged. After previously denying any wrongdoing, Tolstedt became the first Wells Fargo executive to be convicted criminally over a scandal that resulted in the firing of 5,300 employees for falsifying bank records and other ethical violations.
San Francisco-based Wells Fargo has previously acknowledged its ambitious sales goals develops a culture that prompted its branch employees to open millions of unauthorized and fraudulent accounts from 2002 to 2016. The US Department of Justice alleges that Tolstedt – now a resident of Scottsdale, Arizona – learned about the abuses that began in 2004 and then tried to cover up the misconduct in a memo prepared for regulators looking into the practices in 2015.
“Obstructing an investigation compromises the mission of those seeking the truth, and we will hold accountable any person who tries to cover up wrongdoing.” said Acting United States Attorney Joseph T. McNally.