US: Letter shows Wells Fargo warned of fraud in 2007

NEW YORK

A newly revealed letter on Tuesday shows that a former Wells Fargo employee tried to inform now ex-CEO John Stumpf about the bank's illegal practices much earlier than the chief executive admitted to lawmakers.

Stumpf told a House Committee hearing last month that Wells Fargo’s board was made aware of employees opening unauthorized accounts in customers’ names in 2011 and 2012 and, that its severity became clearer in 2013 when it was, however, still at an early stage of an internal probe.

The letter written to Stumpf almost a decade ago, tells a different story.

"Nine months ago, I reported unethical (and illegal) activity to Wells Fargo Regional Bank," the employee wrote in the September 2007 letter obtained by CNN.

The anonymous employee said the illegal activities in northern California's greater Bay region was "widespread and so highly encouraged that it has become a normal sales practice.

"Left unchecked, the inevitable outcome shall be one of professional and reputational damage, consumer fraud and shareholder lawsuits, coupled with regulator sanctions," the letter warned.

The employee, who began working for Wells Fargo in 1992, said all proper channels and options to report the activities had been exhausted and those attempts had been met with "immediate and lasting retaliation".

The letter also said the employee was "slandered, publicly discredited and effectively blacklisted," and it added that none of the details of the activities had been disclosed to the public or media.

Stumpf was copied to a second letter the employee addressed to the bank's Audit and Examination Committee.

It is not clear whether the letters were sent to or received by Stumpf or board members.

The employee has reportedly since left Wells Fargo.