Consumer Fraud

Whistleblower’s FCA Complaint Accuses Wells Fargo Bank of Fraud, Retaliation

whistleblower 2 370x210 Whistleblower’s FCA Complaint Accuses Wells Fargo Bank of Fraud, RetaliationA former Wells Fargo loan officer who claims he was fired in retaliation for complaining about allegedly illegal and unethical directives that could have forced some customers into foreclosure proceedings has filed a False Claims Act lawsuit against the bank in a Portland, Ore., federal court, accusing it of defrauding the federal government by improperly collecting $1.4 billion in foreclosure-prevention funds for loans during the housing crisis.

In December 2013, whistleblower Duke Tran “stumbled upon a secret Wells Fargo policy that he felt compromised his personal ethics and violated the laws governing mortgage servicing,” the complaint asserts.

The policy required Mr. Tran and other Wells Fargo employees “to unfairly deceive its customers, and the United States, as to the quality of Wells Fargo’s loan documents, in violation of American common law, the Dodd-Frank Act, and Oregon’s Unfair Trade Practices Act,” the suit alleges.

Mr. Tran, an employee of Wells Fargo for 10 years, voiced his concerns about the secret policy but instead of addressing his concerns appropriately, Wells Fargo began retaliating against him and ultimately fired him in November 2014, the complaint alleges.

Mr. Tran’s concerns stemmed from a customer transaction he handled in 2013, in which a couple feared their home would be foreclosed on because they were late on a second mortgage and Wells Fargo had demanded a balloon payment. However, Mr. Tran couldn’t find the couple’s contract in the computer system and told them so.

He then “promptly reported the issue with the customers to his supervisor and others within Wells Fargo,” the suit states. “The next day, Tran received multiple emails from Wells Fargo headquarters that the loan documents were missing and that the company did not have the customers’ contract. Despite this, Wells Fargo directed Tran to deceive the customers and treat the loan like a balloon payment was due.”

Mr. Tran told his supervisor that he was uncomfortable with the directive, believing it to be unethical and illegal. The next day, the supervisor “berated Tran for telling the customers the truth about their loan documents.” The supervisor also told Mr. Tran that his “job was in jeopardy and that [he] had placed Wells Fargo at risk by providing this information to the customers.”

In April 2014, “Mr. Tran received an email about a Wells Fargo internal policy stating that when Wells Fargo has lost loan documents, especially those securing a home, employees are to not share this information with customers under any circumstance.”

Again, Mr. Tran believed the policy to be unethical and possibly illegal, but when he voiced his concerns, his manager allegedly started treating him poorly. The backlash continued in several forms, including alleged racist comments, skewed performance reports, and denial of basic employee allowances until Mr. Tran was fired.

“Wells Fargo’s policy of unfair deception negatively affected not only its employees and customers but also the American taxpayers,” Mr. Tran’s lawsuit asserts.

“From 2009 until March 31, 2015, the United States paid out over $1.4 billion in HAMP [Home Affordable Modification Program] incentives based on Wells Fargo loan modification applications … Of the $1.4 billion paid based on Wells Fargo applications, only a relatively small fraction ($246,871,173.00) went to Wells Fargo’s customers. The largest portions went directly to corporate investors ($825,776,921.00) and Wells Fargo ($359,151,497.00).”

Source: Duke Tran v. Wells Fargo Bank