September 2016 saw the American international banking and financial services holding company, Wells Fargo, slapped with a combined total of $185 million in fines for creating over 1.5 million checking and savings accounts and 500,000 credit cards that its customers never authorized.
The Consumer Financial Protection Bureau issued $100 million in fines, the largest in the agency’s five-year history, along with $50 million in fines from the City and County of Los Angeles, and $35 million in fines from the Office of Comptroller of the Currency.
This huge Wells Fargo fraud is reportedly caused by an incentive-compensation program for employees to create new accounts. It led to the firing of nearly 5,300 employees and $5 million being set aside for customer refunds on fees for accounts the customers never wanted.
When the news of the fraud by Wells Fargo broke, it caused public outrage. Some states and cities have since taken it upon themselves to sanction Wells Fargo for the fraud. For example, the Chicago City Council (CCC) has chosen to suspend its relationship with the bank. The CCC said in a statement on Oct. 5, 2016 that it has approved a one-year suspension for Wells Fargo from the city’s business because of the fraud, joining the states of Illinois and California in punishing the bank.
Although there is enough evidence to prove the criminality of the fraud committed by Wells Fargo, the United States Department of Justice (DOJ) has been walking like a tortoise towards the scandal. This DOJ slowness angered Senators across the country, including Bernie Sanders.
Although the DOJ has said it launched a criminal investigation into the case, its attitude to handling the case is questionable. This has prompted 14 Senators, led by Mr Sanders, to write a stern letter to the country’s Attorney General, Loretta Lynch, to thoroughly investigate the fraud culpability of senior executives at Wells Fargo.
According to the Senators, the Wells Fargo fraud is a “critical test” of the DOJ’s recent push to pursue bad behavior of individual executives, rather than just impose fines on the corporations they represent.
The Senators specifically mentioned the Chief Executive of Wells Fargo, John Stumpf as somebody who should be indicted on criminal charges in the company. The letter by the Senators revealed that Stumpf had testified under oath that he became aware of employees creating fraudulent bank accounts in 2013. However, Stumpf did not disclose the issue to investors, rather, he continued to pitch Wells Fargo’s “inflated” retail accounts’ numbers to Wall Street. This means he knew about the fraud, but decided to keep mute, duping investors.
The letter also said that after the 2008 financial meltdown, the American people watched on as senior executives repeatedly escaped accountability; no top Wall Street executives went to prison or faced prosecution.
Particularly for senator Sanders, he demanded that the DOJ immediately indict the senior executives of Wells Fargo on criminal charges, in order for them to account for their crimes against the American people.
Sanders showed his anger and frustration regarding the case, on Twitter. He wrote on Twitter that it is sad today in the United States when “real” criminals are escaping jail, while innocent citizens who smoke just common marijuana are prosecuted and put behind bars.
How many people at Wells Fargo are going to jail? Zero. But if you smoke marijuana in this country, you get a criminal record.
— Bernie Sanders (@SenSanders) September 20, 2016
In fact, Sanders has taken it upon himself to make sure that the Wells Fargo fraud is thoroughly investigated. Before this current joint letter with the other Senators, he sent another letter to the United States regulators, asking whether criminal investigations were proceeding in the case. In that letter, Sanders wrote “Wall Street won’t change until we make it clear that no bank is too big to fail and no CEO is too big to jail.”
Sanders contested the nomination of the Democratic Party, but lost fraudulently to Hillary Clinton. Many observers said he would have been the best leader for the United States. However, top officials of the Democratic Party diabolically orchestrated to kick him out of the contest, allowing Clinton to take over the nomination of the party.
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