Consumer Fraud

Wells Fargo May Have To Rehire a Second Whistleblower

Wells Fargo fraud Wells Fargo May Have To Rehire a Second WhistleblowerThe Occupational Safety and Health Administration (OSHA) alerted Wells Fargo Bank in December that it was likely to order the bank to reinstate a former bank manager it fired in 2011 after she called the company’s ethics hotlines to report suspected fraud.

If reinstated, Claudia Ponce de Leon would be the second Wells Fargo whistleblower that the federal government has told the bank to rehire.

Ms. Ponce de Leon was the bank manager of a Wells Fargo unit in Pomona, California, when she suspected bankers under her supervision were opening fake accounts for clients in an effort to meet sales goals. She reported the suspected fraud to Wells Fargo’s internal ethics hotline.

Three weeks later, Wells Fargo terminated Ms. Ponce de Leon. Because her employment record showed no signs of poor performance, the bank claimed she drank excessively and engaged in other inappropriate behavior.

Five years after Ms. Ponce de Leon called her concerns in to the ethics hotline, Wells Fargo admitted its bankers across the country opened about two million bogus customer accounts without customers’ knowledge or consent and then charged fees for the fake accounts.

Wells Fargo agreed to pay a $185 million penalty to federal regulators and the City and County of Los Angeles to settle the case. The controversy led to Wells Fargo firing about 5,300 mid-level bankers and ultimately led to the resignation of its CEO, John Stumpf.

Earlier this month, OSHA ordered Wells Fargo Bank to immediately reinstate a former wealth manager who was fired after he reported suspected fraudulent activity at the bank and pay him back pay, compensatory damages, and legal expenses totaling $5.4 million. The award was the largest OSHA ordered to pay a whistleblower in the agency’s history.

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