Wells basic punishment for fraud, the amount varying

Wells Fargo account
fraud scandal

                   In
2016 San-Francisco based bank Wells Fargo (WFC) employees secretly created
millions of unauthorized bank and credit card accounts without permission of
their customers. Opening about 1.5 million fraudulent deposit accounts and
submitting 565,443 credit card applications allowed Wells Fargo employees to
boost their sales targets and receive bonuses.  Consequently, customers
were wrongly charged fees for accounts they did not know existed. In this
business crime scenario, Wells Fargo involved to pay $185 million in fines and
refund $5 million to affected customers. Also,
around
5,300 employees were found to be involved in it over a period of 5 years. In
this case, if the defendant is a liable, so how they justly should be
prosecuted for their fraud?

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 There are different ways to commit a fraud, basically this case can be an
example of identity theft fraud. Fraud is usually comprehended as deceptive
nature calculated for advantage. And usually this kind of people might be
called a fraud. According to the U.S. legal system, fraud is a particular
offense with specific features. Fraud must be proved by showing that the
defendant’s actions involved five separate elements: 1. A false statement of a
material fact; 2. Knowledge on the part of the defendant that the statement is
untrue; 3. Intent on the part of the defendant to deceive the alleged victim;
4. Justifiable reliance by the alleged victim on the statement; 5. Injury to
the alleged victim as a result. 

              
These days, one of the most commonly executed types of fraud is an identity
theft, identity theft robs victims of their money, credit rating, and personal
information. Usually, fraudsters obtain private information illegally, using
them for their personal gain. Fraud takes place when a person deliberately practices
deception in order to gain something unlawfully or unfairly. In many states,
the act of fraud can be classified as either a civil or a criminal wrong. While
fraud is most commonly committed to obtain benefits of value, it sometimes
occurs only for the purpose of deceiving another person or entity. For
instance, if a person makes false statements about private information, it may
be considered fraud, depending on the circumstances. The penalties for fraud
are different depending on the state in which the crime took place and the type
of fraud that occurred. The level of punishment depends on the amount of loss
that the victim suffered. According to the U.S. law system, there are some of
the common penalties for criminals who commit fraud include:

1. Imprisonment ranging from 1 to 10 years
depending on the seriousness of the crime. Federal fraud charges may bring
about significantly longer jail terms;

2.
Fines are
a very basic punishment for fraud, the amount varying depending on the
conditions;

3. Probation is normal for first time
offenders, or for fraud that resulted no loss for the victim. Probation may
also be ordered after the perpetrator is discharged from prison or jail;

4. Compensation is another common
punishment for fraud. This is a requirement for the individual convicted of the
crime to pay back the amount taken from the victim in full. The judge may allow
payments to be made, or provide the criminal with a set amount of time in which
they need to pay everything of compensation.

                
As Wells Fargo convicted all the requirements of fraud they are involved to the
business crime called fraud, they are liable to their fraud crime. There was a
false statement which respectively conducted to the injury to the alleged victim as a result. Wells Fargo has been ordered to
pay $185 million in fines, but committing that fraud Wells Fargo earned $5.6
billion in just the second quarter of this year. Meanwhile, the bank’s victims
were not just charged with overdraft and maintenance fees. Many of them took
“significant hits” to their credit scores for not staying current on
accounts they did not even know about. They will likely have difficulty
securing home and car loans at reasonable rates for years to come, simply
because their bank decided to defraud them.

                  
Although Wells Fargo has been fined for their frauds, however, it does not
cover all the tangible and intangible damages that their customers have been
suffered. First of all, they will not be able to buy tangible properties such
as house, car and etc. because of that their credit ratings got a huge hit. Consequently,
a low credit score makes those injured customers live harder. For example, it
makes difficult to get a loan, rent a house or apartment, mortgage or other
collateral damages could be significant.    

                            Moreover, only
5,300 of the employees that were fired from the Bank, 10% were Managers. What
could have motivated them to engage in this sham? This is not an attempt to
imply all were of malicious but certainly most them led the way. The aggressive
sales goals pushed employees to break the rules. “On average one percent 1
percent of employees have not done the right thing, and we terminated them. I
don’t want them here if they don’t represent the culture of the company,” says
John Stumpf, the company’s longtime chief executive, in an interview with The
Washington Post. It is obvious that simple employees and managers could not
break the law if someone from the top did not allow them to do so. But the
executive board of Wells Fargo claimed that they only fired 1 percent of below
employees and some managers for fraudulent accounts, however they also might be
involved in that business crime although to build a case against a company
executive, prosecutors would have to show “they knew there was a plan to create
false accounts to drive up sales,” said Brandon L. Garret, a professor at the
University of Virginia School of Law. Even if it appears that the executive
purposefully attempted to avoid knowing about the fraud, prosecutors may be
able to build a case. Because they don’t have to participate if there is
willful negligence.

                           From my point of
view, it is not fair to fine Wells Fargo with just $185 million and faring just
about couple thousand employees and lower managers. It is obvious that in this
business fraud all the other “top level” employees and the executive board also
were involved. The defendant (Wells Fargo) should compensate all the affected tangible
and intangible damages to the customers. Also, the executive board of Wells
Fargo should be prosecuted.  

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