According to an official note received from Bloomberg, the bank found an activity which, according to it, shows that some employees deceived the small business administration in the USA, “by submitting false applications for coronavirus relief” The abuse is specifically related to the disaster loan program with economic damage, Bloomberg reported.
EIDL funding comes directly from the SBA. This contradicts the government’s wage protection program, in which banks served as a third party.
RELATED: EDD incorrectly claims leaves mother of East Bay and 4-year-old son homeless
“We have terminated the employment of these individuals and will cooperate fully with law enforcement,”
A source familiar with the situation told ABC7 News that nearly 125 employees had been fired. The bank did not identify the fired employees, but Galloreese wrote in a note that customers were not involved in the alleged fraud.
He added that the company would further investigate the problem and co-operate fully with law enforcement.
RELATED: U.S. unemployment claims reach 898,000 as layoffs remain high 7 months after COVID hits economy
Wells Fargo is not the first bank to have concerns about the misuse of government incentives. In September, JPMorgan Chase said it had identified misuse of COVID-19 relief funds by customers and was investigating whether some of the bank’s employees might be involved.
Potential illegal behavior “includes cases of abuse of clients under the Salary Protection Program, Unemployment Benefits and other government programs,” a note received from ABC News said.
Copyright © 2020 KGO-TV. All rights reserved.