(Reuters) — The former head of Wells Fargo’s retail bank faces prison after agreeing to plead guilty to obstructing a bank investigation related to the sweeping fake account scandal that plagued the bank in 2016.
Carrie Tolstedt, 63, faces up to 16 months in prison under a plea deal with federal prosecutors filed Wednesday. The development is a rare example of a senior bank executive facing jail time because of his job.
She also faces a $17 million civil penalty announced separately by the Office of the Controller of the Currency, which said Tolstedt was “substantially responsible” for the widespread sales abuses at the bank, where potentially millions of accounts were opened without customer approval.
Tolstedt agreed to plead guilty to one count of obstructing a bank investigation and is expected to make his first court appearance in Los Angeles in the coming weeks, the Los Angeles U.S. attorney̵
7;s office said in a statement.A lawyer for Tolstedt, who ran the bank’s lending to individuals and small businesses from 2007 to 2016, declined to comment.
Wells Fargo paid $3 billion in February 2020 to settle federal civil and criminal investigations, admitting at the time that it pressured employees between 2002 and 2016 to meet unrealistic sales goals, leading them to open fake accounts for customers.
A spokesperson for Wells Fargo declined to comment.
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