Wells Fargo settles fake account scandal for $3 billion

Wells Fargo has agreed to pay $3 billion to settle criminal charges and a civil action stemming from its widespread mistreatment of customers in its community bank over a 14-year period, the Justice Department announced on Friday.

From 2002 to 2016, employees used fraud to meet impossible sales goals. They opened millions of accounts in customers’ names without their knowledge, signed unwitting account holders up for credit cards and bill payment programs, created fake personal identification numbers, forged signatures and even secretly transferred customers’ money.

In court papers, prosecutors described a pressure-cooker environment at the bank, where low-level employees were squeezed tighter and tighter each year by sales goals that senior executives methodically raised, ignoring signs that they were unrealistic. The few employees and managers who did meet sales goals — by any means — were held up as examples for the rest of the workforce to follow.

“This case illustrates a complete failure of leadership at multiple levels within the bank,” Nick Hanna, U.S. attorney for the Central District of California, said in a statement. “Wells Fargo traded its hard-earned reputation for short-term profits, and harmed untold numbers of customers along the way.”

Now the bank is grappling with the lingering consequences. Part of Friday’s deal, which includes a $500 million fine by the Securities and Exchange Commission, is a deferred prosecution agreement, a pact with prosecutors that could expose the bank to charges if it engages in new criminal activity.

“We are committing all necessary resources to ensure that nothing like this happens again,” Wells Fargo’s chief executive, Charles Scharf, said in a statement on Friday.

The penalty, while large, is not record breaking. In 2015, a judge ordered BNP...