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Former executive of SF-based bank to plead guilty for role in scandal

A Wells Fargo bank sign is affixed to a window on Jan. 13, 2021, in New York. | Mark Lennihan/AP Photo, file

A former Wells Fargo Bank executive accused of overseeing a ruse that created millions of bogus customer accounts has agreed to plead guilty to criminal charges likely to send her prison for her role in the scandal.

The agreement filed Wednesday in a Los Angeles federal court calls for the former Wells Fargo executive, Carrie Tolstedt, to serve a 16-month prison sentence for obstructing regulators' investigation into abusive sales practices that culminated in the bank paying billions of dollars in fines. Tolstedt, 63, also agreed to pay a $17 million fine in a separate civil settlement with the government that also bans her from working again in the banking industry.

Prosecutors are requesting an April 7 court hearing to review the plea agreement.

Tolstedt was the longtime head of the Wells Fargo's division responsible for its sprawling network of retail branches, before leaving in 2016 just before evidence of the bank's abusive sales tactics surfaced. After previously denying any wrongdoing, Tolstedt becomes the first Wells Fargo executive to be held criminally culpable for a scandal that resulted in the firing of 5,300 employees for falsifying bank records and other ethics violations.

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San Francisco-based Wells Fargo had previously admitted that its ambitious sales goals had fostered a culture that prodded its branch employees to open millions of unauthorized and fraudulent accounts from 2002 to 2016. The U.S. Justice Department alleged Tolstedt—now a resident of Scottsdale, Arizona—knew about the abuses dating back to 2004 and subsequently tried to cover up the misconduct in a memo prepared for regulators looking into the practices in 2015.

"Obstructing an investigation compromises the mission of those seeking the truth, and we will hold accountable any individual who attempts to conceal wrongdoing." said Acting United States Attorney Joseph T. McNally.

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