Carrie L. Tolstedt, a former Wells Fargo & Co. executive, avoided jail time but was sentenced Friday to three years of probation, including six months of house arrest, for her role in the bank’s fake accounts scandal, which resulted in billions of dollars in fines and Fines. thousands laid off.
Tolstedt’s sentence, handed down by the US District Court for the Central District of California, in Los Angeles, also included a $100,000 fine and 120 hours of community service.
Federal prosecutors earlier this month submitted a recommendation for a 12-month prison sentence followed by a year of probation, according to a court filing. Tolstedt’s lawyers asked for three years’ probation, the Wall Street Journal reported.
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executives, including former CEO John Stumpf, have been banned from the banking industry for life. Tolstedt is the only director to date to have received a criminal sentence and faces the possibility of prison time.
“Sentencing such a corporate executive to six months of house arrest, presumably in a mansion, cannot seriously be considered a punishment,” said Dennis Kelleher, co-founder and CEO of Better Markets, a consumer organization.
Tolstedt agreed to a prison sentence of up to 16 months in March when she pleaded guilty to obstructing a government investigation into the bank’s widespread sales misconduct, including opening millions of unauthorized bank accounts.
Prosecutors had said a term of 16 months would be at the high end of the sentencing range for the obstruction offense.
Tolstedt retired in 2016, around the time of the Wells Fargo fake account scandal. In May, she paid a $3 million civil penalty to the Securities and Exchange Commission to settle allegations that she misled investors about the success of Wells Fargo’s Community Bank.
In March, she was also hit with a $17 million civil penalty from the Office of the Comptroller of the Monetary Fund for her role in “systemic misconduct in sales practices,” the government said.
She also had $65 million in compensation recovered by Wells Fargo following the scandal, which also resulted in Stumpf’s ouster, as well as billions in fines for the company. Thousands of employees were also laid off as the bank took action to fix its sales practices.
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