By Max Jones / Original to ScheerPost
Former head of the Wells Fargo community banking division, Carrie Tolstedt, “agreed to plead guilty to the criminal charge of obstructing regulators’ investigation” [of Wells Fargo],” according to CNN Business. While prosecutors pursued a 12-month prison sentence for Tolstedt, she was sentenced to three years probation, will pay a $100,000 fine, and serve 120 hours of community service.
According to Reuters, “The actual sentence mirrored Tolstedt’s request, and she accepted ‘full responsibility’ for her crime.”
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While at Wells Fargo, Tolstedt oversaw the scheme that “resulted in more than 2 million fake bank and credit card accounts being opened without customers’ consent or knowledge” starting in 2011.
According to CNN Business,
“Tolstedt signed off on the accuracy of Wells Fargo’s public disclosures ‘when she knew or was reckless in not knowing’ that statements about the bank’s cross-sell metric were ‘materially false and misleading,’ the Securities and Exchange Commission said when it charged Tolstedt and [Wells Fargo CEO John] Stumpf in 2020.”
Tolstedt was the only Wells Fargo executive to face criminal charges relating to the account fraud scandal. Both Tolstedt and Strumpf, “[bragged] to investors about the scale of the community bank’s open accounts, despite the fact that millions of accounts were fabricated by employees trying to meet unrealistic sales goals set by management.” Strumpf’s penalty was being banned from the banking industry and paying a $17.5 million fine.
When Tolstedt announced her retirement shortly before the account scandal became public in July 2016, Stumpf called her a “role model.” He also exclaimed she was “principled” and a “dear friend” of his.
Testifying before Congress, Stumpf said he was “deeply sorry” that Wells Fargo didn’t stop the misconduct sooner. However, according to CBS, “he never even considered [firing Tolstedt].”
Despite her role in the scheme, Tolstedt was rewarded handsomely for her time at Wells Fargo. According to CNN Business, “She received a $125 million retirement package when she left Wells Fargo, though the bank has clawed back about $67 million of that.”
According to CNN Business, the only high-level Wall Street executive to face time for his role in the 2008 financial crisis was Suisse banker, Kareem Serageldin. Nearly all of the players in the financial crisis have been rewarded and remain influential players in the financial industry.
Tolstedt is only the latest financial criminal to walk free among them, with millions of dollars to show for it.
Max Jones is a staff writer and video producer for ScheerPost. A summa cum laude graduate of the University of Southern California, where he studied communications and screenwriting, he is following his post-USC plans to be an independent filmmaker and screenwriter, and a journalist at ScheerPost. He has covered various topics in both his web show Journalists for Sale and writing, focusing most heavily on issues of free speech, information warfare, and foreign policy.