|Wells Fargo reports that it has fired employees suspected of improperly collecting coronavirus relief funds. The firm determined that its staffers had defrauded the Small Business Administration “by making false representations in applying for coronavirus relief funds for themselves,” according to an internal memo reviewed by Bloomberg. The bank’s memo said that it has “zero tolerance for fraudulent behavior.”|
Between 100 and 125 people were terminated, according to a source with knowledge of the situation. These findings add to evidence what may prove to be broad abuse of the CARES Act relief monies. The SBA has said that it has “stringent fraud-protection safeguards” in place, but adds that it was under enormous pressure to move money into the economy quickly to help offset the impact of the coronavirus pandemic. A Bloomberg Businessweek analysis of SBA data in August identified at least $1.3 billion in suspicious payments.
Considered against the backdrop of recent enforcement actions that have impacted JP Morgan and Citi, this latest news of further employee misconduct at Wells Fargo is likely to invite closer attention from regulators and Congress.