Wells Fargo has fired more than 100 employees for abusing coronavirus. These employees were accused of improperly applying for federal coronavirus relief money.
Employees made “false representations in applying for coronavirus relief funds for themselves,” said HR head David Galloreese.
This news leaked out through a memo, which revealed this fraud committed by Wells Fargo employees. According to the memo, alleged abuse happened outside the employees’ roles at the bank.
Employees are accused of exploiting the Small Business Administration by tapping the Economic Injury Disaster Loan program. This program allows businesses to apply for a forgivable $10,000 grant and borrow up to $2 million. Around 100 to 125 Wells Fargo employees were fired.
Wells Fargo would cooperate with law enforcement to deliver justice. It is still not clear that the bank is already under investigation or not.
“We have terminated the employment of those individuals and will cooperate fully with law enforcement. These wrongful actions were personal actions, and do not involve our customers,” wrote David Galloreese. He added, “We have zero tolerance for fraudulent behavior and will continue to look into these matters. If we identify additional wrongdoing by employees, we will take appropriate action,”
Wells Fargo is not the first company to face this issue; more than 500 of JPMorgan Chase employees had received assistance from pandemic relief programs, including dozens said to have done so improperly.
The Economic Injury Disaster Loan program offered advances of up to $10,000 that did not need to be repaid. The SBA has approached banks to check for suspicious deposits from the disaster loan program to any kind of suspicious account and their employees’ accounts. Banks are able to see whether relief funds have been deposited into their employees’ accounts, which revealed a big fraud going on with disaster relief money.
$250 million in loans and advance grants was given to potentially ineligible recipients, and $45.6 million in potentially duplicate payments. In July, the small business administration’s inspector general issued a memo about “serious concerns” of potential fraud in the program due to exploitation of loopholes by bank employees.
In August, it wasfound that at least $1 billion was transferred through suspicious payments. The bank is dealing with challenges as it continues to deal with expenses linked to refunds for customers harmed.
Talking about accused employees, David 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.”.