Unequal Justice: Wells Fargo and the Double Standard of Corporate Crime

As a criminal defense attorney, I’m troubled by the gap between the prison terms ordinary defendants can face and the punishment imposed on executives involved in large corporate scandals. The September 2023 sentencing of former Wells Fargo executive Carrie Tolstedt raises that concern. After pleading guilty to obstructing a bank examination tied to the fake-accounts scandal, she received three years of probation, including six months of home confinement, a $100,000 fine, and 120 hours of community service.

A person convicted of aggravated identity theft under 18 U.S.C. § 1028A(a)(1) faces a mandatory two-year prison term, served consecutively to imprisonment for the underlying felony and other offenses. When a court imposes multiple § 1028A sentences at the same time, it may allow those terms to run together, in whole or in part, under the applicable sentencing guidelines and policy statements. Tolstedt’s conviction was for obstructing a bank examination. Whether particular conduct in the fake-accounts scheme also amounted to aggravated identity theft would require proof of that offense’s elements.

The Federal Sentencing Guidelines help explain how courts arrive at a sentence. Judges must consider the guideline range, but a statutory mandatory minimum generally limits their ability to impose a lower sentence unless a legal exception applies.

Wells Fargo paid $3 billion in 2020 to resolve federal criminal and civil investigations into its sales practices. Tolstedt separately received a banking-industry ban and a $17 million civil penalty from the Office of the Comptroller of the Currency. Those sanctions were substantial. Even so, her avoidance of prison raises a fair question about how the justice system holds senior executives to account.

The misuse of customers’ personal information makes the comparison worth examining, even though the convictions and sentencing rules differ. Were the charges brought and the punishment imposed adequate to address the harm?

As a defense lawyer, I know the primary duty of justice should be the blind, objective application of the law. But cases like Tolstedt’s and the broader handling of the Wells Fargo scandal set a dangerous precedent. It implies that one can effectively sidestep accountability for even the gravest of corporate wrongdoings with sufficient influence and affluence.

Such outcomes erode public trust in our justice system. They paint a bleak picture where outcomes are more influenced by wealth and status than objective legal standards. Its message is clear: corporate titans can commit fraud on an industrial scale and face minimal consequences.

For a justice system that seeks to be truly equitable, the weight of the law must bear down uniformly, without favor or bias. Given their vast influence, corporate executives should be held to at least the same standards as the everyday citizen, if not higher.

To let grand-scale corporate malfeasance go largely unpunished isn’t merely a failure to the direct victims; it’s a profound betrayal of societal trust. Equal justice under the law should be more than an empty slogan.