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DOJ Demands Wells Fargo Whistleblower Testify In Formal Investigation

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Robert Donachie Capitol Hill and Health Care Reporter

The Department of Justice filed a subpoena Friday with one of the key whistleblowers in its investigation of Wells Fargo’s opening of millions of accounts without customer consent.

U.S. officials have asked former Wells banker Yesenia Guitron to testify before a grand jury in San Francisco Tuesday, Reuters reports.

Guitron lost a private lawsuit against Wells last year, when she claimed the bank made it virtually impossible to meet sales goals without cheating. Guitron also claimed managers responded to her whistleblowing by falsifying papers to show poor performance, barring her from obtaining family medical leave and ultimately firing her.

The subpoena requires Guitron to present all documents related to her time of employment at Wells, including those related to sale practices.

Wells Fargo employees issued 565,000 lines of credit and opened 1.5 million bank accounts for customers without their consent from 2011-2014, and sometimes created false email addresses to sign them up for banking services in order to pad their numbers. Some 14,000 of those credit accounts accrued over $400,000 in fees, reports CNN Money

The Consumer Financial Protection Bureau slapped the bank with a $185 million fine in August — the largest it has ever levied by the federal agency — after finding these practices were rampant throughout Wells Fargo since 2011.

Wells Fargo management initially responded to the crisis by firing 5,300 employees associated with the scandal, but these surface changes were not enough for customers or lawmakers.

Former Chairman and CEO John Stumpf faced congressional investigation and a grilling from Senate leadership. Following the congressional hearings, the Wells Fargo board ordered Stumpf to cough up $41 million in assets and earnings he accrued from his decades-long tenure at the bank. The board also cut some mid-level management. (RELATED: Wells Fargo Investors Want Company Board To Do More)

Stumpf announced he was stepping down as chairman and CEO Oct. 12.

Beyond the Justice Department investigation, Wells is taking heat from other entities.

The Office of the Comptroller of the Currency (OCC) announced in late November that it “revoked” certain provisions of the original deal and that Wells Fargo now has to comply with a host of new demands. For instance, the firm must provide the OCC with a “written notice” if it is making changes in “directors and senior executive officers.” The firm can no longer provide “golden parachute payments,” a term used to describe the lucrative benefits an employee gets from the firm if they are terminated or retire.

The Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) determined Tuesday afternoon that Wells Fargo had again failed to provide an adequate outline for “living wills.” The FDIC slapped the largest American bank with two sanctions: It cannot establish international bank entities or acquire non-bank subsidiaries.

Wells Fargo is allowed to submit another living wills outline to federal regulators March 31.

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