Disgraced Wells Fargo exec Carrie Tolstedt faces a year in prison over bogus accounts scandal as prosecutors urge judge to send corporate crooks ‘a clear message’

Federal prosecutors have asked that a former Wells Fargo executive serve a year in prison for her role in the massive fake account scandal that rocked the bank in 2016.

Between 2002 and 2016, Wells Fargo employees opened some two million deposit and credit card accounts without customer approval or knowledge, to improve key performance indicators, a survey found.

Carrie L. Tolstedt, 63, agreed in March to plead guilty to obstructing a bank review in connection with the scandal, which cost Wells Fargo $3 billion to settle federal civil and criminal investigations.

In a filing Friday in federal court in Los Angeles, prosecutors asked Judge Josephine L. Staton to jail the disgraced banker for 12 months, writing, “rogue companies need to be given a clear message to maintain a lucrative position through criminal behavior is not worth the risk.’

“The sentence must reflect the seriousness of the crime: the defendant attempted to hide from regulators one of the greatest banking scandals in modern history,” prosecutors wrote.

In a filing Friday in federal court in Los Angeles, prosecutors asked Judge Josephine L. Staton to jail the disgraced banker for 12 months.

Government lawyers added that “when senior corporate executives commit crimes, they should not be able to avoid jail time because they are unlikely to re-offend.”

The filing said the US Probation Office had recommended a three-year probation with no jail time – but said a serious crime called for a harsher sentence.

Tolstedt’s attorneys did not immediately respond to a DailyMail.com request for comment on Saturday.

They are unlikely to seek jail time for Tolstedt and will have a chance to make their case before the September 15 sentencing hearing.

The maximum legal penalty for obstructing a bank review is five years in federal prison.

Tolstedt reached a plea deal that provides for a prison term of up to 16 months in prison, which prosecutors say is the high end of the recommended sentencing range for the misdemeanor offense of obstruction.

Separately, Tolstedt agreed in May to pay a $3 million fine to settle the Securities and Exchange Commission civil case, without admitting or denying the allegations.

The SEC accused her of misleading investors about the success of Wells Fargo’s core business, which involved questionable sales practices used to inflate key performance indicators.

From mid-2014 to mid-2016, Tolstedt publicly described and endorsed Wells Fargo’s “cross-sell measurement” as a way to measure the bank’s financial success, despite being inflated by accounts and services. unused, unnecessary or unauthorized. , according to the SEC.

Before the scandal broke, Wells Fargo was considered to have an excellent reputation among major banks.

The bank called its branches “stores” and once had a policy of trying to get every Wells Fargo customer to have eight financial products with the company.

The bank’s business policies, pushed by senior management, were aggressive and unrealistic.

Separately, Tolstedt agreed in May to pay a $3 million fine to settle the Securities and Exchange Commission civil case, without admitting or denying the allegations.

Bank employees were chastised for not setting inflated sales quotas, which ultimately led to many employees fiddling with Wells Fargo’s sales system in order to achieve these artificial sales targets.

For example, a number of Wells Fargo customers, including seniors, signed up for online banking when they did not have Internet access.

The documents that expose the charges against Wells Fargo relied heavily on the behavior of “Executive A,” described as the head of Wells’ community banking operations and regional banking division from 2002 to 2017.

Tolstedt held these positions during this period.

Since the scandal broke, Wells Fargo has reformed its compensation practices and no longer bases employee compensation on selling additional accounts to customers.

The bank has also replaced its chief executive twice, most recently by former Bank of New York Mellon chief executive Charlie Scharf, who has indicated he is planning significant changes to try to regain the trust of regulators. .