Wells Fargo has terminated between 100-125 employees for collecting the coronavirus (Covid-19) relief funds inappropriately.
In an internal memo, the bank said that its staff defrauded the Small Business Administration (SBA) “by making false representations in applying for coronavirus relief funds for themselves.”
It added that the bank has “zero tolerance for fraudulent behaviour”.
These employees tapped the government’s Economic Injury Disaster Loan (EIDL) programme, which was launched to help businesses amid the pandemic.
The EIDL funds came directly from the SBA, unlike the Paycheck Protection Program (PPP).
In the memo, Wells Fargo head of human resources David Galloreese said: “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.”
He added that Wells Fargo “will continue to look into these matters. If we identify additional wrongdoing by employees, we will take appropriate action.”
The EDIL programme has been widely abused by bankers and Well Fargo’s findings add to the evidence.
Employees have been able to legally take advantage of the US aid for the businesses they run, besides doing their jobs.
However, banks can identify whether their staff deposited the aid into their accounts.
For example, banking giant JPMorgan Chase, in an earlier review found that 500 workers tapped the EIDL programme, of which several people did so improperly.
The SBA had instructed the banks to keep an eye out for suspicious deposits from the programme to both its customers and staff.
In August, the SBA data reported at least $1.3bn in such transactions.
Basically, the programme offers loans to businesses, however, the focus is on the advances of $10,000 which does not have to be repaid.
SBA also identified that the potentially ineligible recipients received over $250m in aid and $45.6m in duplicate payments.
The agency said that it has “stringent fraud-protection safeguards”.