Wells Fargo WFC -6.02%
& Co. fired more than 100 employees who allegedly cheated a federal pandemic relief program.
An internal bank investigation found that 125 employees made false statements applying for a type of small business relief program called “Disaster Loan for Economic Disabilities,” said a person familiar with the matter.
“We have stopped hiring these people and will cooperate fully with law enforcement,” David Galloreez, the bank’s human resources manager, said in an internal note. “These wrongdoings are personal actions and do not involve our customers.”
The Small Business Administration Program provides these loans directly to business owners who have lost revenue due to the pandemic. In July, the SBA inspector general said he had been subjected to fraud complaints.
Financial institutions do not play any role in approving or granting loans, but monitor them when they are deposited in the accounts of SBA clients. Nine of them reported nearly $ 200 million in suspicious transactions, according to the inspector general’s report.
Wells Fargo’s layoffs, first reported by Bloomberg News, followed an earlier revelation by JPMorgan Chase & Co. that it was investigating potential wrongdoing, including another effort to ease small businesses, the payroll protection program.
Write to Ben Eisen at email@example.com
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Appears in the print edition of 15 October 2020 as “Bank employees dismissed on SBA loans”.