Kathleen Fitzgerald was sitting at her desk inside Wells Fargo’s branch in Red Bank, N.J., when a co-worker asked her to step into another room to take a phone call.
It was the Monday before Thanksgiving in 2016. Less than six weeks earlier, the bank’s CEO, John Stumpf, had resigned amid a rapidly unfolding scandal involving millions of suspicious customer accounts.
When Fitzgerald picked up the phone, she learned that she was the target of an internal probe. A San Antonio-based investigator wanted to know if Fitzgerald had ever used her own personal email address for the purpose of enrolling a customer in online banking.
Fitzgerald denied that she had done so, but the investigator had proof to the contrary — 16 instances in which her Yahoo email address was listed on a customer account. There were various mitigating facts and circumstances, but the call seems to have ended without any discussion of them.
For instance, the investigator apparently did not ask Fitzgerald if anyone else at Wells Fargo had instructed her to use her personal email address in order to boost online banking enrollment numbers. Fitzgerald later said that her former boss had taught and pressured her to use a variety of underhanded sales tactics, and that her complaints about unethical practices had been ignored.
“I was in complete and total shock that this was even happening to me,” Fitzgerald said during a 2018 deposition, as she recalled her phone call with the bank’s investigator. “My mind was all over the place.”
Four days later, Fitzgerald learned that she was being fired. She turned in her keys and was escorted out of the building. Thirty-three years old and without a college degree, Fitzgerald was facing the end of a once-promising career in banking. “I cried my eyes out,” she recalled in her deposition.
Next February, a trial in Fitzgerald’s lawsuit against Wells Fargo is scheduled to begin in Toms River, N.J. Fitzgerald alleges that she was fired in violation of a New Jersey law that offers protection to employees who object to fraudulent conduct. Wells has denied any wrongdoing.
The broad outlines of the nationwide sales scandal at Wells Fargo are well known. Low-level employees, under heavy pressure to meet sales quotas, misbehaved on a massive scale. But less well understood is exactly how this pressure was transmitted through many layers of management at the bank, and how it felt to employees on the front lines.
Fitzgerald’s lawsuit offers a rare look into the granular details of what happened at the branch level. If her case goes to trial, it may also provide new insights about what Stumpf, former CEO Tim Sloan and former consumer banking head Carrie Tolstedt knew about the widespread misconduct.
John Tatulli, a New Jersey lawyer who represents Fitzgerald, said that he plans to subpoena the three former high-ranking Wells Fargo executives.
“I want to bring them into a courtroom, under oath, and cross-examine them,” Tatulli said. “They were able to resign, quote unquote, whereas Kathleen was kicked out the door.”
Wells Fargo and Sloan declined to comment on the lawsuit. Lawyers for Stumpf and Tolstedt did not respond to requests for comment.
‘It all trickles down’
Fitzgerald had no prior experience in banking back in 2013 when she went to work as a teller at Wells Fargo’s branch in Monmouth Beach, N.J.
In a deposition, she described a complicated relationship with the branch manager who hired her. Loredana Nadasan initially became a mentor and a personal friend, but their relationship deteriorated after Fitzgerald was fired. While they were working together, Nadasan allegedly pressured Fitzgerald to cross ethical lines in an effort to meet aggressive sales quotas, according to Fitzgerald’s testimony.
Using an employee’s personal email address in order to enroll customers in online banking — which caused the activation link to be sent to the wrong person — was one example.
“I couldn’t see why or how that would be OK, but I have my direct supervisor telling me, my boss telling me that I have to do this because we need the solutions,” Fitzgerald said.
She claimed that Nadasan told her, “No, no, no, it’s OK. You can’t do it all the time. But yes, you do need to do it now.”
Another tactic that Fitzgerald said she complained about was “ghost funding” — temporarily moving money from a customer’s savings account to a newly opened checking account, sometimes without the customer’s knowledge, so that the account opening process would be classified as complete.
She also recalled objecting to a practice known as “sandbagging” — classifying accounts that were opened late in one month as having been opened in the following month, since the earlier month’s sales quota had already been met.
In yet another example of questionable conduct, Fitzgerald said that branch employees sometimes had to stay after work in order to sell credit cards over the phone, making calls from a room that did not have cameras.
Instead of providing their signature, consumers were asked to give their mother’s maiden name, which might provide evidence that they had provided their consent. Branch workers sought to obtain signatures later, she said.
Fitzgerald claimed there were a couple of occasions when Nadasan, worried about missing signatures, instructed her to go to someone’s house. “I said, ‘Absolutely not,’” Fitzgerald testified. “’I’m not going there after work, knocking on their door while the family is serving dinner, to ask them to sign this piece of paper. That is absolutely crazy, and I am not doing it.”
Fitzgerald has said that she never complained to either the bank’s human resources department or its compliance hotline because she feared retaliation.
“The reason that I never called H.R. is because H.R. does not stay confidential,” she said in her deposition. “I know this from personal experiences in my store and Loredana telling me that as well.”
Fitzgerald also indicated that her complaints to two assistant managers and Nadasan fell on deaf ears.
“I did not agree with any of it, I really didn’t, but she was my boss,” Fitzgerald testified. “She taught me, I learned it from her, and she learned it from her bosses, and it all trickles down.”
Fitzgerald’s testimony shed light on the pressure that managers at Wells Fargo felt from their superiors to meet their daily sales numbers. Since 2016, Wells Fargo has eliminated its sales goals and overhauled its system of incentive pay for retail banking employees.
“As the hours go by, and you get further on into the day, when Loredana starts to feel desperate for the numbers. She doesn’t want to call in on one of those phone calls, like the 11:00 phone call and the 5:30 phone call, and tell them that we are behind on our numbers,” Fitzgerald said in her deposition testimony.
“So she would start to freak out and really get on us. And that’s when she would say, ‘I don’t care what you have to do, do it.’”
Wells Fargo has said in court documents that the three employees who allegedly received Fitzgerald’s complaints were not involved in either its internal investigation of Fitzgerald or the bank’s decision to fire her. Nadasan was on maternity leave when Fitzgerald’s employment was terminated.
“There is nothing tying Fitzgerald’s complaints about Nadasan and the things Nadasan made her do to her termination,” Wells Fargo’s attorneys wrote in an August court filing.
Nadasan, who could be a witness at the upcoming trial, no longer works for the $1.9 trillion-asset bank. She was originally a defendant in the lawsuit, but Fitzgerald’s lawyer did not contest her motion to have the allegations against her dismissed, and New Jersey Superior Court Judge Mark Troncone granted that request last month. Through her lawyer, Nadasan did not respond to requests for comment.
‘They need to be exposed’
By the time the phony account scandal broke, Fitzgerald had gotten several promotions. In the fall of 2016, Wells agreed to sponsor her to obtain licenses to sell insurance products, mutual funds and other securities, according to her lawsuit.
During her deposition, Fitzgerald admitted that she lied in the phone interview with the internal investigator. When pressed on why she hadn’t told the investigator that she was following her boss’s instructions, she said: “Because we were always told if we went under any kind of investigation, you never admit to anything ever.”
The internal investigator, Stacy Haby, later wrote in a court document that the probe of Fitzgerald was triggered by an automated report from the bank’s Sales & Services Conduct Oversight Team. “I recommended termination because Fitzgerald had created false banking records and then lied to me about it,” she wrote.
Fitzgerald is not the first ex-employee fired in connection with Wells Fargo’s phony account scandal to sue. But Tatulli, her attorney, said that he is not aware of any such cases that have gone to trial.
Back in 2016, Wells said that it had already fired more than 5,000 employees for sales misconduct. “They are usually able to eliminate these cases long before they get to this point,” Tatulli said.
He noted that the judge is allowing Fitzgerald to sue for punitive damages, which means that jurors, if they rule in favor of the plaintiff, will be allowed to award a large monetary judgment in an effort to send a message to the scandal-plagued bank.
In the three years since Fitzgerald was fired, she has worked for lower wages as a waitress and an insurance saleswoman.
“I have a black mark against me. The banks won’t take me,” she said during her deposition. “This was supposed to be my career path.”
In an interview Tuesday, she expressed the desire to send a message that Wells Fargo’s conduct is unacceptable. “I have details of things the public has not been made aware of,” Fitzgerald said. “They need to be exposed.”
