WASHINGTON — The former head of Wells Fargo’s retail bank faces jail time after agreeing to plead guilty to obstructing a bank investigation related to the massive counterfeiting scandal that rocked the bank in 2016.
Carrie Tolstedt, 63, faces up to 16 months in prison under a plea deal with federal prosecutors filed Wednesday. The development marks a rare example of a senior bank executive facing jail time for his job.
Tolstedt agreed to plead guilty to one count of obstructing a bank investigation and is expected to appear in court in Los Angeles for the first time in the coming weeks, the U.S. law firm said in a statement.
She also faces a $17 million civil fine, announced separately by the Office of the Comptroller of the Currency, which said Tolstedt was “significantly responsible” for the bank’s widespread sales abuses, where millions of accounts may have been opened without the authorization of the bank. customer.
A lawyer for Tolstedt, who led the bank’s lending to individuals and small businesses from 2007 to 2016, declined to comment. Reuters previously reported that prosecutors were targeting Tolstedt.
Wells Fargo paid $3 billion in February 2020 to settle federal civil and criminal investigations, admitting at the time that it pressured employees between 2002 and 2016 to meet unrealistic sales targets, leading them to open fake accounts for customers.
A Wells Fargo spokesperson declined to comment.
No criminal charges against individuals were announced at the time, although in 2020 the OCC filed civil charges against Tolstedt and several other former senior bank executives, imposing fines and barring former CEO, John Stumpf, from banking. Tolstedt is now also banned from the industry. The fine announced on Wednesday resolves those charges.
“The legal system and regulators rely on companies and their executives to cooperate fully during investigations of potential misconduct. But in this case, Ms. Tolstedt has taken steps to cover up misconduct at Wells Fargo,” Joseph McNally, acting U.S. Attorney for the Central District of California, said in a statement.
Some said development did not go far enough.
“Finally, decades after the biggest fraud in American history, a banker is going to jail,” said Bartlett Naylor, a financial policy advocate at Public Citizen in Washington. “But Tolstedt did not operate alone; she had bosses. They must also face real justice.