Former Wells Fargo executive avoids prison in sentencing for fake sales scandal case

A former executive involved in Wells Fargo’s fake sales accounts scandal will not serve any jail time, a federal judge decided on Friday.

Carrie Tolstedt, 63, of Scottsdale, Arizona, was sentenced to three years’ probation, including six months of home confinement, for her role in misleading investors, the U.S. Attorney’s Office for the Central District of California office confirmed to The Charlotte Observer.

Tolstedt had been facing up to 16 months in prison, The Charlotte Observer previously reported.

U.S. District Judge Josephine Staton also fined Tolstedt $100,000 and ordered her to serve 120 hours of community service, in addition to the probation.

”Such a sentence reflects the seriousness of defendant’s conduct, promotes respect for the law, provides just punishment, and affords general deterrence to other executives who might find themselves tempted to skirt the truth,” Assistant United States Attorney Carolyn Small said in a sentencing memo filed with the court. “At the same time, it acknowledges that defendant has accepted responsibility for her offense and does not pose a continuing danger to the public.”

Tolstedt attorney, Matthew Umhofer in Los Angeles did not immediately respond to a request for comment Friday.

More about Carrie Tolstedt and Wells Fargo

From 2014 to 2016, Tolstedt publicly endorsed a key Wells Fargo metric that measured the bank’s financial success, The Charlotte Observer previously reported. But the metric was inflated by accounts and services that were unused, unneeded or unauthorized.

Tolstedt retired from Wells Fargo in 2016.

In March, Tolstedt pleaded guilty to obstructing a government examination into the bank’s widespread sales practices misconduct, which included opening millions of unauthorized accounts and other products.

In a separate civil settlement also announced in March, Tolstedt was banned from working in the banking industry and ordered to pay a $17 million penalty.

Based in San Francisco, Wells Fargo has its biggest employee base in Charlotte, with about 27,000 workers. Earlier this week, the bank said it was going to continue to have layoffs as a way to reduce expenses.

More about Wells Fargo’s scandals

Over more than a decade, hundreds of thousands of Wells Fargo employees took part in sham sales practices, opening millions of fake accounts in customers’ names to meet unreasonably high sales goals, the Observer reported in 2020.

In 2020, the bank agreed to pay a $3 billion fine to federal prosecutors and the SEC over its practices.

In May, Wells Fargo was settling a class-action lawsuit from shareholders for $1 billion over claims the bank misled them about how it was complying with regulators in the aftermath of its fake sales scandal.

This story was originally published September 15, 2023, 3:15 PM.