The California Department of Justice is investigating Wells Fargo for allegations of criminal identity theft.

California Attorney General Kamala Harris served a search warrant to the San Francisco bank on Oct. 5 demanding that the bank identify the names of Wells Fargo employees who opened unauthorized accounts as well as the names of managers and other communication related to the phony account scandal.

The search warrant and a 14-page redacted affidavit provided to American Banker by Harris' office on Wednesday indicate that Wells may have violated sections of the penal code that involve using unauthorized personal information or stealing someone's identity, both of which are felony violations.

The documents also appear to go further than other investigations into the phony-accounts scandal by investigating whether employees opened unauthorized accounts for mortgage borrowers and wealth management clients.

The Los Angeles Times first reported the investigation on Wednesday, citing documents obtained through a public information request.

Kristin Ford, a spokewoman for Harris, said the California AG's office could not comment further because the investigation is ongoing. Wells did not immediately respond to a request for comment, but a spokesman told the Times the bank was cooperating with the warrant.

Criminal charges could be brought against individual Wells employees for improperly accessing the bank's computer system and using customers' personal identifying information, the affidavit stated.

Under California law, "criminal identify theft" occurs when someone cited or arrested for a crime uses another person's name and identifying information, resulting in a criminal record created in that person's name, the California attorney general's office has stated.

The affidavit cited the need to identify Wells branch managers, area managers and regional managers who worked with the employees who opened or created unauthorized accounts.

"The unauthorized activity by Wells employees not only included bank accounts but also lines of credit, credit cards, mortgages and wealth management accounts," the affidavit stated.

Wells has come under intense scrutiny since Sept. 8, when the bank agreed to a $190 million settlement with the Los Angeles City Attorney's office, the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency. An internal investigation found that Wells fired 5,300 employees from 2011 to 2015 for opening 2 million unauthorized accounts.

U.S. attorneys in San Francisco, New York and Charlotte, N.C. are reportedly vying to lead civil and criminal investigations into Wells.

On Tuesday, two San Francisco supervisors introduced a resolution that would "end all business with Wells Fargo," in response to the fake account scandal and other practices.

In addition, California, Illinois, Ohio, New York and the cities of Chicago and Seattle have cut relationships with Wells, primarily bond underwriting, in the wake of the scandal.

 

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