Disgraced Wells Fargo exec Carrie Tolstedt faces a year in prison over bogus accounts scandal as prosecutors urge judge to send corporate crooks ‘a clear message’

Federal prosecutors have called on a former Wells Fargo executive to serve a year in prison for her role in the massive counterfeiting scandal that rocked the bank in 2016.

Between 2002 and 2016, Wells Fargo employees opened some two million deposit and credit card accounts without customer consent or knowledge to boost key performance metrics, research shows.

Carrie L. Tolstedt, 63, in March agreed to plead guilty to obstructing a banking investigation related to the scandal, which cost Wells Fargo $3 billion to settle federal civil and criminal investigations.

In a filing in Los Angeles Federal Court, prosecutors on Friday called on Judge Josephine L. Staton to jail the disgraced banker for 12 months. They wrote, “Corporate offenders should be given a clear message that maintaining a lucrative position through criminal behavior is not worth the risk.”

“The sentence should reflect the seriousness of the crime: the defendant attempted to conceal one of the largest banking scandals in modern history from regulators,” the prosecutors wrote.

In a file in Los Angeles Federal Court, prosecutors on Friday called on Judge Josephine L. Staton to jail the disgraced banker for 12 months.

The government’s lawyers added that “if top corporate executives commit crimes, they should not be allowed to escape jail because they are not at risk of recidivism.”

The filing noted that the U.S. Probation Office had recommended three years’ probation without parole, but argued that a serious crime required a more severe sentence.

Tolstedt’s lawyers did not immediately respond to a request for comment from DailyMail.com on Saturday.

They likely won’t seek jail time for Tolstedt, and will have a chance to plead their case ahead of her sentencing hearing on Sept. 15.

The maximum legal penalty for obstructing a bank investigation is five years in prison.

Tolstedt has entered a plea deal calling for a prison sentence of up to 16 months. Prosecutors say this is on the high side of the sentence for the obstruction offense.

In addition, in May Tolstedt agreed to pay a $3 million fine to settle the Securities and Exchange Commission’s civil suit, without admitting or denying the allegations.

The SEC accused her of misleading investors about the success of Wells Fargo’s core business, which involved dubious sales practices used to inflate key performance metrics.

From mid-2014 to mid-2016, Tolstedt publicly described and endorsed Wells Fargo’s “cross-sell metric” as a way of measuring the bank’s financial success, despite the fact that it was inflated by accounts and services that were unused, unnecessary or were unauthorized. , the SEC said.

Before the scandal broke, Wells Fargo was considered to have an excellent reputation among the major banks.

The bank referred to its branches as “stores” and at one time had a policy of allowing each Wells Fargo customer to purchase eight financial products from the company.

The bank’s sales policy, under pressure from top management, was aggressive and unrealistic.

In addition, in May Tolstedt agreed to pay a $3 million fine to settle the Securities and Exchange Commission’s civil suit, without admitting or denying the allegations.

Bank employees were berated for not meeting high sales quotas, which eventually led to many employees playing Wells Fargo’s sales system to meet these artificial sales targets.

For example, a number of Wells Fargo customers, especially the elderly, have signed up for online banking while not having internet access.

The documents detailing the charges against Wells Fargo relied heavily on the behavior of “Executive A,” described as the head of Wells’ community banking operations and regional banking division from 2002 to 2017.

Tolstedt held those positions during that period.

Since the scandal broke, Wells Fargo has reformed its compensation practices and no longer bases employee compensation on selling additional accounts to customers.

The bank has also replaced its CEO twice, most recently with former Bank of New York Mellon chief Charlie Scharf, who has indicated he is planning significant changes to try to regain regulators’ trust.