Up to 125 employees may have fraudulently applied for loans
Wells Fargo & Co. WFC, -1.59% 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.
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This article was originally posted by MarketWatch.