Wells Fargo has axed between 100 and 125 employees for allegedly obtaining pandemic assistance funds in an unethical way, Bloomberg News reported.
Wells Fargo says some employees lied on their applications in order to secure coronavirus relief funds, hoodwinking the Economic Injury Disaster Loan program managed by the U.S. Small Business Administration, the bank's head of human resources David Galloreese said in an internal memo as reported by Reuters.
The funding, as well as other government and state stimulus programs, has been the target of scammers.
In his memo, Galloreese said Wells Fargo had fired the staff and had agreed to "cooperate fully" with the authorities - adding that the wrongful actions committed by the staff were personal ones, and don't involve the bank's customers.
According to Galloreese, while these acts of wrongdoing are very disappointing, "they don't represent the high integrity of the vast majority of Wells Fargo's employees," the Charlotte Observer quoted him as saying.
Wells Fargo is not the first bank to experience this kind of trouble with its workers and stimulus programs. Last month, JPMorgan Chase terminated a number of staff for allegedly misusing funds that were intended to help businesses hurt by the world health disaster, the Financial Times reported.
The Jamie Dimon-led bank is also looking into fraud related to the Paycheck Protection Program, a funding initiative for small businesses for which the lender approved loans of almost $30 billion.
In April this year, the Consumer Financial Protection Bureau slapped Wells Fargo with $1 billion in penalties for inappropriate lending and wrongful motor-vehicle insurance policies.
Wells Fargo has 27,000 employees working in Charlotte. The $2 billion profit that it reported Wednesday for its third quarter earnings disheartened stakeholders who continue to be upset by the company's expenses, with shares dropping 6% on the same day.
