The Office of the Comptroller of the Currency (OCC) on Tuesday finalized penalties against three former Wells Fargo executives, ordering them to pay a total of $18.5 million for their involvement in the bank's infamous fake accounts scandal. The fines mark the end of long-running enforcement proceedings against the former executives, who are accused of failing to prevent or address misconduct tied to aggressive sales practices at Wells Fargo.

Michael Hsu, the OCC’s acting comptroller, issued final decisions that impose significant penalties on the three former executives: Claudia Russ Anderson, former senior risk officer for Wells Fargo’s retail banking division; David Julian, the bank’s former chief auditor; and Paul McLinko, who served as executive audit director.

Russ Anderson received the largest fine, totaling $10 million, while Julian was fined $7 million, and McLinko was penalized $1.5 million. In addition to her fine, Anderson was also banned from working in the banking industry. These penalties conclude an ongoing saga of investigations into Wells Fargo's fraudulent account practices, which spanned from 2013 to 2016.

The OCC’s final decision underscores the actions of Anderson, Julian, and McLinko during a period when it was revealed that Wells Fargo employees were opening unauthorized customer accounts to meet stringent sales targets. The misconduct was part of a larger scandal that led to billions of dollars in penalties and settlements for the bank, as it faced accusations of pressuring employees into unethical practices.

The three former executives are part of a broader group of Wells Fargo leaders who faced similar claims. These individuals were accused of failing to adequately address or even recognize the full scope of misconduct within the bank, allowing the fake accounts to proliferate for years. Wells Fargo, for its part, has admitted to widespread misconduct that involved the unauthorized creation of millions of customer accounts from 2002 to 2016, a practice driven by excessive sales pressures within the bank.

In 2022, OCC Administrative Law Judge Christopher McNeil recommended that Anderson, Julian, and McLinko face fines, stating that there was “sufficient cause” to support the penalties. These amounts were consistent with the OCC’s original request filed in early 2020. According to Judge McNeil, the three executives knew about the issues at the bank but chose to disregard them, sometimes even withholding vital information from the bank’s board and misleading regulators.

In his decision, Hsu described Anderson’s behavior as particularly damaging to Wells Fargo’s reputation, citing her failure to challenge the bank's incentive compensation program, her inability to escalate known risks, and her repeated downplaying of the misconduct. Anderson was also found to have provided misleading information to the OCC in 2015, which led to additional legal violations.

“Between 2013 and 2016, Anderson failed to credibly challenge the bank’s incentive compensation program, failed to escalate known or obvious risks, and repeatedly downplayed the misconduct. She also violated the law by failing to provide accurate information to the OCC back in 2015,” the OCC’s decision reads. While the decision declined to rule on whether Anderson’s actions breached her fiduciary duties to the bank, the penalties imposed reflect her significant role in the scandal.

Meanwhile, both Julian and McLinko were faulted for failing to properly manage audits that could have detected or documented the fraudulent sales practices. The OCC also criticized McLinko for his failure to maintain professional independence from the bank's retail banking division, which was central to the misconduct. Both former executives were found to have failed to adequately escalate the issue when they became aware of the problematic sales practices.

Russ Anderson, David Julian, and Paul McLinko are part of a group of former Wells Fargo executives who have faced enforcement actions in connection with the sales practices scandal. Many other individuals involved in the scandal have already settled with the OCC. For example, former CEO John Stumpf reached a settlement in 2020, agreeing to pay a $17.5 million fine. Additionally, former general counsel James Strother reached a settlement in 2023, paying a $3.5 million fine.

One of the most high-profile cases related to the scandal involved Carrie Tolstedt, the former head of Wells Fargo’s retail banking division. Tolstedt pleaded guilty to obstruction charges in 2023 and received a sentence that included six months of home confinement, three years of probation, a $100,000 fine, and 120 hours of community service. Tolstedt is the only former Wells Fargo executive to face criminal charges in connection with the fake accounts scandal.

Despite the penalties, Wells Fargo has not yet responded to requests for comment regarding the recent OCC fines. Efforts to reach Julian, McLinko, and Anderson were also unsuccessful.

The cases against Anderson, Julian, and McLinko are part of a broader series of enforcement actions that stem from the bank's longstanding issues with unethical sales practices. The investigations into the scandal, which have spanned several years, reflect the ongoing scrutiny of the banking industry’s culture and the consequences of failing to properly oversee corporate misconduct.

The cases are titled In the Matter of David Julian, case number AA-EC-2019-71; In the Matter of Paul McLinko, case number AA-EC-2019-72; and In the Matter of Claudia Russ Anderson, case number AA-EC-2019-81, before the Office of the Comptroller of the Currency.