Former execs sue Wells Fargo
Pair say they were wrongfully blamed and fired for bank’s accounts scandal.
Two former regional presidents who oversaw Wells Fargo branches across Southern California say they were wrongfully blamed and fired for promoting unethical sales practices — something the pair say they unsuccessfully tried to get their superiors to address.
Reza Razzaghipour and Marla Razzaghipour, who are married, were quietly dismissed in March, just a few weeks after Wells Fargo publicly fired several higherranking executives over their roles in the bank’s sham-accounts scandal.
The Razzaghipours say they complained about and reported bad practices — including the opening of unauthorized accounts — but were fired anyway, both because they complained and because the bank “needed to scapegoat certain management to appease regulators, its board of directors and/or the public,” according to the suit.
In the suit, filed Thursday in Los Angeles, the Razzaghipours allege that several higher-ups knew about or promoted illegal conduct and that some of those executives were able to keep their jobs, including former Los Angeles-area executive David DiCristofaro, who is still with the bank but in a different role.
DiCristofaro knew about
and encouraged illegal practices, including so-called “simulated funding” — the practice of making a new sham account look legitimate by transferring money from a customer’s existing account, the lawsuit alleges.
“Wells Fargo knew this, yet gave DiCristofaro a promotion while scapegoating the whistleblower plaintiffs by terminating their employment,” the lawsuit says. The Razzaghipours also allege that DiCristofaro engaged in illegal age, gender and sexual orientation discrimination and that Marla Razzaghipour was fired in part for complaining.
The suit also names John Sotoodeh, a former Los Angeles regional president who now has a different position within the bank, and alleges he encouraged illegal conduct.
An internal bank investigation, the results of which were published in April, noted that Sotoodeh was in charge of the Los Angeles market when it became “the epicenter of the simulated funding phenomenon.”
Bank spokesman Paul Gomez denied the allegations and said DiCristofaro and Sotoodeh could not comment.
“The termination decisions were not retaliatory as alleged in the complaint,” Gomez said in an email. “The company terminated the employment of these two individuals for legitimate and lawful reasons.”
The Razzaghipours are suing Wells Fargo for wrongful termination, retaliation and defamation, accusing the bank and a spokeswoman of smearing them as untrustworthy in a statement released to the Los Angeles Times and other publications.
In response to an inquiry from The Times, a spokeswoman provided a statement, cited in the lawsuit, confirming the Razzaghipours were no longer with the bank but declining to comment on whether they had resigned or been fired. The statement went on to say that Wells Fargo was “focused on ensuring we have the right people and leaders in place to rebuild trust and build a better bank.”
The Razzaghipours say the statement implied they were “untrustworthy and responsible for Wells Fargo’s fake account, simulated funding and/or other illegal conduct.”
Wells Fargo faces several lawsuits related to the sham-accounts scandal and other practices that have been uncovered over the last year. But based on a review of court records, the Razzaghipours’ suit appears to be the first such case filed by any of the handful of Wells Fargo executives who recently have been fired by the bank.
Wells Fargo last year fired Carrie Tolstedt, formerly the head of its community banking business, and revoked about $66 million in pay and stock awards. The bank’s internal report pinned much of the blame for the bank’s overbearing sales culture and the creation of unauthorized accounts on Tolstedt. An attorney for Tolstedt challenged the report’s findings.
In February, the bank announced it had fired and withheld bonuses from four additional community banking executives: Shelley Freeman, former Los Angeles regional president and later the head of consumer credit solutions; Pamela Conboy, Arizona lead regional president; Matthew Raphaelson, head of community bank strategy and initiatives; and Claudia Russ Anderson, former community bank chief risk officer.
The Razzaghipours were fired the following month. Reza Razzaghipour, who had worked for Wells Fargo since 2000, according to the suit, oversaw bank operations in Ventura and Santa Barbara counties, Bakersfield, Santa Clarita and the West San Fernando Valley. Marla Razzaghipour had worked for the bank since 1994, according to the suit, and oversaw branch operations in parts of the San Fernando Valley, Hollywood and the South Bay.
They’re seeking damages of at least $50 million, saying the bank’s practices have cost them money and job prospects and caused emotional distress, depression and anxiety.
‘The termination decisions were not retaliatory as alleged .... The company terminated the employment of these two individuals for legitimate and lawful reasons.’ — Paul Gomez, Wells Fargo spokesman