Financial services company Wells Fargo has fired employees for allegedly misusing COVID-19 funds that were meant for struggling small businesses. The company, in an employee memo, said that it has detected some false representations made by bank staff while applying for coronavirus relief funds. The relief program was an initiative by the US Small Business Administration. The abuse involved the loan program of Economic Injury Disaster, reports said. Funds for Economic Injury Disaster Loan came directly from the SBA. The bank stated that the action by its employees was outside of their assigned work responsibilities. “These employees of the bank have been terminated with an immediate effect. We will give full corporation in the investigation of the matter by law enforcement,” Wells Fargo said.
David Galloreese, head of human resources, said that wrongful actions were employees’ personal actions and our customers were not involved in it. “We follow the zero-tolerance policy. We will continue to monitor these matters. If we identify any more employees involved in wrongdoing, we will take appropriate action,” he added. There are around 100 to 125 employees against whom action has been taken. According to an employee of the company, the investigation initiated by Wells Fargo is still underway.
It must be noted that Wells Fargo is not the first bank that has unearthed abuse of government programs by its own employees. JPMorgan Chase is one of them. It found that over 500 of its employees were among the beneficiaries of the coronavirus pandemic relief programs. Reports suggest that dozens of them did improper things to receive assistance. The advance of up to USD 10,000 is offered under the Economic Injury Disaster Loan of the SBA. The best part about the assistance is that it needs not to be repaid. Not only employees of the bank, others too are abusing such programs. The SBA has been encouraging banks to be alert about such suspicious deposits in accounts of both customers as well as staff from the disaster loan program. The SBA has flagged serious concerns about potential fraud in the disaster program. A memo regarding this was issued in July.