SAN FRANCISCO -- Wells Fargo has fired more than 100 employees for collecting coronavirus relief funds meant for struggling small businesses.
According to an employee memo obtained by Bloomberg, the bank detected activity it believes shows some employees defrauded the U.S. Small Business Administration "by making false representations in applying for coronavirus relief funds for themselves." The abuse specifically involved the Economic Injury Disaster Loan program, Bloomberg reported.
EIDL funds came directly from the SBA. That is contrary to the government's Paycheck Protection Program where banks served as a third party.
"We have terminated the employment of those individuals and will cooperate fully with law enforcement," David Galloreese, Wells Fargo's human resources chief, said in the memo. "These wrongful actions were personal actions, and do not involve our customers."
A person familiar with the situation told ABC7 News that nearly 125 employees were fired. The bank did not identify the employees fired, but Galloreese did write in the memo that no customers were involved in the suspected fraud.
He added that the company will further investigate the issue and will fully cooperate with law enforcement.
Wells Fargo is not the first bank to have concerns about the misuse of government stimulus funds. In September, JPMorgan Chase said that it identified misuse of COVID-19 relief funds by customers, and was investigating whether some of the bank's employees may have been involved.
The potentially illegal conduct "includes instances of customers misusing Paycheck Protection Program loans, unemployment benefits and other government programs," according to a memo obtained by ABC News.