Wells Fargo Fires 125 Employees for COVID Relief Fraud, Culture Unchanged

Wells Fargo terminates between 100 and 125 employees for fraudulently obtaining COVID-19 relief funds through the SBA’s Economic Injury Disaster Loan (EIDL) program. Employees created fake profiles and made false representations to receive advances of up to $10,000 from the pandemic relief program. The firings occur just months after Wells Fargo agreed to pay $3 billion for its fake accounts scandal, demonstrating that the corporate culture enabling fraud—and the pattern of punishing low-level workers while protecting leadership—remains fundamentally unchanged.

Personal Fraud, Institutional Pattern

Wells Fargo emphasizes that the fraud involved employees’ “personal actions” outside their work responsibilities rather than customer-facing misconduct. Employees applied for EIDL advances using falsified information, stealing from a program designed to help struggling small businesses during the pandemic. The bank states it identified the fraud through monitoring, terminated the employees, and committed to cooperating fully with law enforcement.

Same Playbook, Different Scandal

The response mirrors Wells Fargo’s handling of the fake accounts scandal: identify fraudulent employees, fire them swiftly, emphasize cooperation with authorities, and frame the problem as individual bad actors rather than systemic failure. Missing from the response: any acknowledgment that Wells Fargo’s culture might cultivate fraud, any consequences for leadership who oversee repeated fraud scandals, or any structural changes to prevent future misconduct.

The timing is particularly striking. In February 2020, Wells Fargo paid $3 billion and admitted to systematic fraud spanning 2002-2016. By October 2020—just eight months later—over 100 employees are engaged in new fraud schemes. The pattern suggests the fake accounts scandal’s resolution changed little about the underlying culture.

Broader Industry Problem

Wells Fargo is not alone. JPMorgan Chase identified more than 500 employees who received pandemic relief assistance, with dozens doing so improperly. The SBA Inspector General flagged serious concerns about $250 million in potentially fraudulent EIDL loans and grants. The systemic nature of the fraud suggests broader issues with corporate culture in banking and inadequate internal controls during crisis response.

Significance

The firing of 125 Wells Fargo employees for pandemic relief fraud—occurring months after a $3 billion settlement for the fake accounts scandal—demonstrates that neither massive penalties nor admitted systematic fraud produce meaningful cultural change. The bank’s response remains identical: fire workers, cooperate with authorities, move forward. No executives face consequences for presiding over an institution where fraud repeatedly occurs. No fundamental reforms are implemented.

The episode confirms that Wells Fargo learned the wrong lesson from the fake accounts scandal. Rather than fundamentally reforming the culture that enables fraud, the bank perfected the response playbook: identify fraud quickly, fire employees aggressively, emphasize cooperation, and insulate leadership from accountability. The $3 billion settlement and deferred prosecution agreement changed the bank’s crisis management tactics without changing its fundamental culture. Fraud continues; only the fraudsters change, cycling through low-level employees while leadership remains constant and unaccountable.