- Wells Fargo has fired at least 100 workers that it believes lied when trying to get COVID-19 relief funds, Bloomberg reported Wednesday and Business Insider confirmed.
- Wells Fargo said the employees committed fraud against the US Small Business Administration, which oversees the funds, “by making false representations in applying for coronavirus relief funds for themselves,” according to the memo, which Business Insider reviewed.
- The SBA’s inspector general had warned US banks in July about “serious concerns of potential fraud” surrounding the funds, which are disbursed through its Economic Injury Disaster Loan program.
- JPMorgan Chase also said in September that it had fired workers for improperly accessing the same funds.
- Visit Business Insider’s homepage for more stories.
Wells Fargo has terminated between 100 and 125 workers for improperly obtaining COVID-19 relief funds by lying on their applications, Bloomberg first reported on Wednesday and Business Insider confirmed.
In an internal memo reviewed by Business Insider, the bank said it had identified employees it believes have “defrauded the U.S. Small Business Administration (SBA) by making false representations in applying for coronavirus relief funds for themselves” through the SBA’s Economic Injury Disaster Loan program.
“We have terminated the employment of those individuals and will cooperate fully with law enforcement,” Wells Fargo HR chief David Galloreese said in the memo. Gallorese also wrote that Wells Fargo believes the fraud occured “outside of their work responsibilities” as Wells Fargo employees.
A person familiar with the matter told Business Insider that Wells Fargo is continuing to investigate the matter.
“The SBA is not able to comment on specific fraud cases. Evidence of waste, fraud, and abuse with any of the SBA’s loan programs is not tolerated and should be reported,” SBA spokesperson Carol Chastang told Business Insider in an email.
In addition to funding $670 billion for the Paycheck Protection Program (PPP) to keep small businesses afloat, the federal government’s CARES Act allocated another $10 billion to the existing Economic Injury Disaster Loan (EIDL) program.
But the SBA’s inspector general warned US banks in July about “serious concerns of potential fraud” within the EIDL program, which offers immediate cash advances of up to $10,000 as well as rapid loans of up to $25,000.
The watchdog office said its preliminary review found “strong indicators of widespread fraud.” Specifically, its investigation into hundreds of hotline complaints found $250 million in loans and grants to “potentially ineligible recipients” and another $45.6 million in potential double payments.
Reports of Wells Fargo’s terminations come barely a month after JPMorgan Chase also fired several workers for improperly accessing EIDL funds. Bloomberg reported in September that at least 500 Chase employees have accessed the funds (though not necessarily improperly) and that the bank is investigating the matter.
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