Wells Fargo Shareholders Say Bank Staff “Rounded Up” Undocumented Workers As Part Of Phony Account Scam

Image courtesy of Mike Mozart

We’re all well aware by this point that Wells Fargo employees opened up more than 2 million bogus accounts in customers’ names in order to game the bank’s sales incentive/quota system. Some former bank staffers revealed what they claim are some of the tricks used to create these fake accounts — including rounding up undocumented day laborers at convenience stores and construction sites to get them to sign up for accounts (only to then allegedly give them additional accounts they didn’t ask for).

This is all according to a memorandum [PDF] filed this week in a shareholder lawsuits that accuses the Wells Fargo board of directors of being a “lap dog, rather than the watch dog” and repeatedly turning a “blind eye to obvious ‘red flag’ warnings of illegal conduct – warnings from every direction, including from employees, customers, regulators, and even third-party lawsuits.”

“When foot traffic was slow, the branch manager on duty instructed Wells Fargo employees of Hispanic heritage to go to a nearby 7-Eleven”

As the bank recently acknowledged in a pending class-action settlement, Wells Fargo employees were creating fraudulent accounts as far back as 2002 — 14 years before the bank admitted to the bad behavior. The shareholders say that during all those years, bank staffers came up with creative — if allegedly illegal, unethical, and immoral — methods of boosting their sales numbers.

In a sworn declaration, a former Wells Fargo banker in Petaluma, CA, says that the pressure from management to meet sales goals “led branch employees to engage in unethical practices to keep up.”

He claims that elderly customers regularly complained about fake accounts, saying “every time they met with a local banker at Wells Fargo for any reason, upwards of 9-10 new debit cards would be issued in their names without their authorization.”

“Wells Fargo employees were instructed to ‘round up’ a group of the undocumented workers and drive them back to the Wells Fargo branch to open up checking accounts and savings accounts”

One tactic he cites for allegedly ginning up sales numbers was to take advantage of the undocumented laborers in the area.

“When foot traffic was slow, the branch manager on duty instructed Wells Fargo employees of Hispanic heritage to go to a nearby 7-Eleven,” he recalls in his sworn statement. “The Wells Fargo employees were instructed to ‘round up’ a group of the undocumented workers and drive them back to the Wells Fargo branch to open up checking accounts and savings accounts.”

Why would these day laborers go for this? The banker says that Wells would offer to waive check-cashing fees for these workers.

He tells the court that, from what he was told by Wells employees at other branches in California, this practice was not uncommon.

In fact, in another sworn declaration, a former manager from a Wells Fargo branch clear across the country in eastern Pennsylvania says that when sales began to sag at her bank, upper management began a program dubbed “Hit the Streets Thursdays,” in which Hispanic branch employees were allegedly instructed to “force random people off the streets or from Social Security offices to them into local branches and pressure them into opening new accounts.”

A third statement, this time from a Wells Fargo banker in Utah, seems to mesh with these allegations. In his declaration, he says that his branch would regularly target workers at nearby construction sites or the local Coca-Cola facility — both places where workers were often unbanked because of their immigration status.

“Hispanic branch employees were allegedly instructed to ‘force random people off the streets or from Social Security offices to them into local branches and pressure them into opening new accounts'”

According to his statement, management encouraged bans to “promise the undocumented immigrants that they would not have to pay any fees to cash their checks.”

But what these people didn’t know was that Wells employees were also opening up savings accounts and credit cards for people who had not asked for either. So long as those additional accounts weren’t closed within 60 days, the bankers would receive credit for the sale, according to the statement.

Similarly, while bank employees allegedly offered cash to the Coca-Cola employees to open accounts, this banker says Wells staff intentionally did not tell these new customers that their accounts had minimum balance requirements.

Additional statements from previous Wells employees highlight other alleged bad behavior on the bank’s part.

A banker from Arizona tells the court that he was pressured into bringing on a Wells Fargo sales staffer with a reputation for being the leading salesperson for the entire state. The banker says this employee was opening 30 to 40 accounts each week, which he describes as a “ridiculous amount for any store.”

The problem was, notes the banker, this new guy was signing up a lot of new customers, but didn’t seem to have all that much work to do after those accounts were started.

When the banker looked at this employee’s sales records, he says he noticed some issues. According to the banker, the sales rep was opening around new accounts for each customer. He was also allegedly “opening 40-50 accounts and assigning them to people with fake names each week, or he was opening accounts for other workers in our store without telling them.”

The banker says these accounts were never used, though debit cards were issued. This is important, he explains in his declaration, because a new account have to have a debit card associated with it for the account to be credited as a sale; the rules never said anything about the cards ever having to be used.

This sales rep allegedly funded bogus accounts by temporarily transferring money from existing accounts. Sometimes he forgot, says the banker, resulting in actual customers — who had no idea they were being defrauded — being hit with overdraft charges.

The banker says he brought these concerns to his manager, who dismissed them and insisted the questionable sales were all legitimate. What’s more, when a management position opened up at this branch, this alleged fraudster was promoted. The banker says his boss told him to “play ball, or get out.” That boss was also promoted, to district manager.

He says he later attempted to contact the Wells Fargo ethics hotline, but claims that he soon learned that the other employee had brought an ethics charge against him for wrongfully accessing his sales records. You can probably guess which of the two men was fired by the bank.

In a statement to the San Francisco Chronicle, a rep for Wells Fargo says the claims raised by these former employees are “offensive, because they run counter to the expectations of Wells Fargo, and would be a violation of policies we have in place to safeguard against abuses.”

“These allegations are inconsistent with our policies, values and the relationships we work hard to build with all parts of our community,” said the spokesman. “Wells Fargo has long been committed to providing banking services to immigrants in a manner that complies fully with the law, and we have controls in place to ensure we comply with requirements.”