Security & Fraud

Wells Fargo Fires Over 100 For Allegedly Collecting COVID Relief Funds

Wells Fargo has fired over 100 employees for allegedly improperly collecting COVID-19 relief funds, according to sources quoted by Bloomberg.

The staffers reportedly defrauded the Small Business Administration (SBA) by "making false representations in applying for coronavirus relief funds for themselves," according to Bloomberg. They reportedly applied for Economic Injury Disaster Loan (EIDL) funds in ways deemed fraudulent.

In response, Wells Fargo Head of Human Resources David Galloreese said those employees have been terminated and the company will cooperate with law enforcement.

“These wrongful actions were personal actions and do not involve our customers," he said, according to Bloomberg.

It's possible for U.S. employees at large companies to tap into financial aid for things they do on the side, but in this case, the feature was widely abused, with over 500 employees tapping into EIDL programs and many of them doing so improperly, Bloomberg reported.

The SBA had expanded the EIDL program earlier this year to help small- to medium-sized businesses (SMBs) desperate for extra cash to boost their businesses during the pandemic. The agency warned banks to be on the lookout for suspicious deposits from the program, as much of the concern is around advances of up to $10,000 that don't have to be repaid, Bloomberg reported.

The SBA's inspector general, according to Bloomberg, said it had identified over $250 million possibly given to ineligible recipients for the program, and another $45.6 million was possibly duplicate payments.

The bank was questioned over its handling of Paycheck Protection Program (PPP) loans by both federal and state officials. And the bank was one of several questioned over allegedly playing favorites with PPP loans.

Earlier this month, Wells Fargo cut another 700 jobs in commercial banking, and that number could eventually rise to the tens of thousands. The cuts affected workers throughout the division, which usually works with enterprises with annual revenues of over $5 million.

Katie Ellis, a spokeswoman for the bank, said the cuts were the beginning of a multi-year effort to "build a stronger, more efficient company."

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