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Statement of Probable Cause Background: In both October and December of 2013, the Los angeles Times newspaper printed a series of articles concerning the practices of Wells Fargo bank employees signing customers up for new accounts and services without their knowledge. Based upon those articles, the Los Angeles City Attorney's Office and the U. $. Consumer Fraud Protection Agency opened an investigation into alleged illegal conduct. Wells Fargo also launched an internal investigation into these allegations as well. On May 4, 2015, the Los Angeles City Attorney's Office filed a civil complaint against Wells Fargo in Los Angeles Superior Court alleging “unlawful, unfair, and fraudulent sales and related business acts and practices in violation of California Business and Professions code 17200, et seq.” on September 13, 2016, Wells Fargo entered into a “Stipulated Final Judgment" with the Los Angeles City Attorney's Office to settle the consumer fraud allegations Wells Fargo’s internal investigation resulted in the termination of approximately 5,300 employees out of 100,000 employed in its retail banking operation for allegations related to account sales fraud. Summary: Without the knowledge or consent of its customers, Wells Fargo bank employees engaged in a practice of opening unauthorized customer accounts. The goal of this activity was to generate profits for the bank by collecting fees and charges from the unauthorized accounts and credit cards. Bank employees profited from this activity by obtaining bonuses based on their individual productivity. This activity was allegedly committed between May of 2011 and July of 2015, and until September of 2015 for credit cards. Current estimates from open sources indicate that Wells Fargo employees opened in excess of 2 million unauthorized accounts nationwide (1.5 million bank accounts and 565,000 credit card accounts). Fees generated from those accounts include $2.6 million from 85,000 of the fraudulent bank accounts and $403,000 from 14,000 of the fraudulent credit card accounts. The total number of accounts opened in California has not been provided; however, the Los Angeles City Attorney's Office determined that a significant portion of the fraudulent activity was “clustered” in the southwestern United states, and Wells Fargo itself used a bank branch in the Los Angeles area as a training example for other branches on how to achieve sales goals. Los Angeles City Attorney’s Investigation: According to an extensive investigation conducted by the tos Angeles City Attorney's Office into Wells Fargo’s activities, they determined that Wells Fargo engaged ina“. . . pernicious and often illegal sales tactics to Statement of Probable Cause maintain high levels of sales of banking and financial products.” The City Attorney's complaint when on to say, ‘Wells Fargo imposes unrealistic sales quotes on its employees, and has adopted policies that have, predictably and naturally, driven its bankers to engage in fraudulent behavior to meet those unreachable goals." Adding, “The result is that Wells Fargo has engineered a virtual fee-generating machine, through which its customers are harmed, its employees take the blame, and Wells Fargo reaps the profits.” ‘The City Attorney's investigation revealed that in order to open these unauthorized accounts Wells Fargo employees improperly accessed the bank's computer system and used the Personal Identifying Information (PII) of its customers. This is a violation of California Penal Code (CPC) section 529 - False Personation of Another, and CPC 530.5 - Unauthorized use of personal identifying information. The unauthorized activity by Wells Fargoemployees not only included bank accounts, but also lines of credit, credit cards, mortgages, and wealth management accounts. I know from personal experience and professional dealing with various banks that their records are generally computerized. This allows customers to go from branch to branch, as well as online, to conduct business. Bank employees would have to unlawfully access Wells Fargo’s computer system to obtain customers’ information to open or create unauthorized accounts The City Attorneys complaint went on to state, ‘Wells Fargo has known about and encouraged these practices for years. It has done little, if anything, to discourage its employees’ behavior and protect its customers. Worse, on the rare occasions then Wells Fargo did take action against its employees for unethical sales conduct, Wells Fargo further victimized its customers by failing to inform them of the breaches, refund of fees they were owed, or otherwise remedy injuries that Wells Fargo and it bankers have caused.” ‘The City Attorneys complaint also alleged that Wells Fargo employees engaged in a practice referred to as “gaming.” Gaming consisted of “opening and manipulating fee-generating customer accounts through often unfair, fraudulent, and unlawful means ." This included omitting signatures or adding unwanted secondary accounts to primary account, without the account holder's permission. Moreover, the city Attorney's complaint alleges, “Other practices utilized as part of these ‘gaming’ schemes have included misrepresenting the costs, benefits, fees, and/or attendant services that come with the accounts Statement of Probable Cause Additionally, the City Attorney’s complaint stated, *. . . gaming practices have caused significant stress to, and hardship and financial loss for its customers. Specifically, Wells Fargo had: (a) withdrawn money from customer's authorized accounts to pay for the fees accessed by Wells Fargo on unauthorized accounts opened in the customers’ name; (b) placed customers into collection when the unauthorized withdrawals from customer accounts went unpaid; (c) placed derogatory information in the credit reports when fee went unpaid; (4) denied customers access to their funds while Wells Fargo stockpiled account applications; and (e] caused customers to purchase identity theft protection.” ‘The City Attorney’s complaint identified the following “pervasive” gaming practices Wells Fargo utilized to create fraudulent accounts and defraud customers of fees: “Sandbagging” was a practice used by Wells Fargo employees to stockpile customers’ account applications and then open the accounts at a later time when it was convenient for the institution. “Pinning” was the practice of Wells Fargo employees to assign Personal Identification Numbers (PINs) to customers’ accounts without their knowledge or permission. This was done to allow a Wells Fargo employee to impersonate the customer online and enroll him/her in online banking and online bill pay without the customer’s knowledge or consent. “Bundling” was the Wells Fargo employee practice of incorrectly informing the customer that certain products were available only in packages with other products such as additional accounts, insurance, annuities, and retirement plans As a part of its investigation, the Los Angeles City Attorney’s Office operated a “compliant hotline” for possible victims of Wells Fargo’s consumer fraud. The hotline was established on May 5, 2015 through a press release by the City attorney's Office. The hotline received 1,090 calls complaining about Wells Fargo’s fraudulent accounts and its banking practices. The City Attorney's investigation also revealed that Wells Fargo employees generated and used contact information, including email addresses, which would prevent the customer from being notified of the account opening. Those email addresses frequently consisted of a place holder name and the then @wellsfargo.com, e.g. nonameowellsfargo.com or 1234@vellsfargo.com. Statement of Probable Cause BU. S. Consumer Financial Protection Bureau (CFPB) Consent Order: The CFPE is a federal government agency created after the 2008 financial crisis to protect consumers On September 4, 2016 the CFPM entered into a Consent Order with Well Fargo where CFPB determined that Wells Fargo “engaged in the following acts and practices: (1) opened unauthorized deposit accounts for existing customers and transferred funds to those accounts from their owners’ other accounts, all without their customers’ knowledge or consent; (2) submitted applications for credit cards in consumers’ names using consumers’ information without their knowledge or consent; (3) enrolled consumers in online banking services that they did not request; and (4) ordered and activated debit cards using consumers’ information without their knowledge or consent.” As reported in the consent order Wells Fargo “performed an analysis to assess the scope of Improper Sales Practices that occurred between May 2011 and July 2015, including the number of potential instances of such practices.” Wells Fargo's “analysis concluded that its employees opened 1,534,280 deposit accounts that may not have been authorized and that may have been funded through simulated funding, or transferring funds from consumers’ existing accounts without their knowledge or consent. That analysis determined that roughly 85,000 of those accounts incurred about $2 million in fees, which Respondent is in the process of refunding. The fees included overdraft fees on linked accounts the consumers already had, monthly service fees imposed for failure to keep a minimum balance in the unauthorized account, and other fees.” This analysis does not reveal which of these customers were in California. Testimony before the U.S. Senate Banking, Housing, and Urban Affairs Committee: On September 20, 2016, Mr. John Stumpf, CEO and Chairman of the Board of Wells Fargo bank, provided sworn testimony before the U.S. Senate Banking committee. In his testimony Mr. Stumpf stated, “Well, I have the numbers by State, and it typically related to there was some over index or over - people did more wrong things, but more associated with the size of the business were much larger bank in Southern California and Arizona, New Jersey. There were places where we are larger and it fit more the pattern of the size of our organization in those communities.” This testimony was in reference to where Wells Fargo employees had opened the greatest number of fraudulent bank and/or credit card accounts Follow-up Investigation: Based upon the information obtained from the “hotline” complaints received by the Los Angeles City Attorney's office, I contacted the following alleged victims of the Wells Fargo Statement of Probable Cause account opening fraud, and they provided me with statements detailing their dealing with the bank I am requesting that the identity of the below witnesses to be kept confidential in accordance with People vs Hobbs. The information offered herein is provided solely for the purposes of establish probable case. These witnesses were obtained from the data base of the Los Angeles City Attorney's Office “hotline” call log. That log is marked “Confidential Pursuant to Protective Order." Moreover, the Los Angeles Deputy City Attorney handling their case asked that the names of witnesses remain confidential. I ask that the names and identifying information on the below listed witnesses remain confidential to protect their identifies from disclosure to the public on 09/29/16, I spoke to Mr. A, Los Angeles, CA. Mr. A. told me that on a Saturday morning in early May of 2015 he went to his local wells Fargo branch, in Sherman Oaks, to transact business. While he was dealing with the teller, the teller asked him if he would be interested in any additional “products and services” offered by the bank. To be polite, he told the teller he was. The teller then introduced him to a female bank employee by the name of “Gabriela.” He spoke briefly with “Gabriela,” but he did not commit to opening any new accounts, nor did he authorize her to open any new accounts or sign him up for any new services. Mr. A told “Gabriela” that he did not have a time to talk with her at length at that time, and he asked her to call him. He distinctly remembered this encounter because as he was leaving, "Gabriela" asked him for his mother’s maiden name. He felt this was somewhat unusual, but he believed she asked for it so that she could verify his identity; he provided his mother’s maiden name before departing. on the following Monday he returned home from work and discovered a message on his answering machine from "Gabriela." He believed it was a ‘sales" call, so he fast forwarded through the message without listening to it entirely. He intended to return at a later time and listen to the message. on the following Saturday (seven days after his in person visit to the bank), he went online to check his accounts. When he logged on, he discovered he now had a $10,000.00 line of credit linked to his accounts. He remembered the message from “Gabriela” on his answering machine, so he went back and listed to the entire message. The message from “Gabriela” informed him she had opened a $10,000.00 line of credit in his name and linked it to his accounts. she told Statement of Probable Cause him that the entire process had been completed and that he did not need to come to the bank to sign any documents. Mr. A stressed that had not given anyone at the bank permission to open anything in his name, and that he was not planning on opening any new accounts or purchasing any new service. (He already had a checking and saving account with the bank.) He had only spoken with “Gabriela” to be "polite." After discovering the line of credit, Mr. A said that he called Wells Pargo’s customer service line. He had them cancel the line of credit. He said he got the impression from the customer service representative with whom he spoke that this was a common occurrence Mr, A said that he could not be sure of the exact dates these events occurred, but he did remember they occurred around the time the LA City Attorney’s Office put out its press release concerning the law suit against Wells Fargo, and that was why he called. on 09/30/16, I spoke with Ms. B, Los Angeles, CA. Ms. B said she has been a long time customer of Wells Fargo Bank. In either late 2011 or 2012, while she was in a West Los Angeles branch of the bank, she spoke with a teller whom she had dealt with on several occasions in the past. The teller complained to her that they (bank employees) were under a lot of pressure to open new accounts. The teller asked her if she would be interested in opening any additional accounts with the bank. Ms. B told me that she already had three accounts with the bank (two business and one personal checking), so she declined the offer. Her husband also had a separate checking account with the bank. According to Ms. B, this conversation occurred in late 2012 or early 2013. In either late 2013 or early 2014, Ms. B said that she and her husband began to receive notices from Wells Fargo concerning payments they allegedly owed on three life insurance policies held by the bank. Ms. Alfred said neither she nor her husband had ever purchased any life insurance policies, and they had never spoken to anyone at the bank about buying life insurance policies. Ms. B also said that between 2011 and 2015, she was told by bank employees that she would have to close and then reopen her accounts no fewer than six or seven different times. The bank employees consistently told her that there were “problems” with her accounts and that they (the bank) had closed her account and reopened new ones in her name. She said that because of this she “bounced” checks and had to pay fees to the bank. she said that no one at the bank could ever explain to her what the issues were with her accounts. 6 Statement of Probable Cause On 09/30/16, I spoke with Ms. C, Long Beach, CA. Ms. C said that she has banked with Wells Fargo since 2000. Ms. C said that she does not use the ATM or any form of electronic banks, but rather always transacts business in her local branch. She only opened one account with Wells Fargo, and that was checking account. According to Ms. C, she began to have issues with Wells Fargo in 2013. Initially, she discovered that her money was being transferred out of her checking account into a saving account. At first, the monthly transfer was $50; however, over time, the amount grew to $150. When she asked the teller about his, the teller told her it was done as overdraft protection for her checking account. Ms. Debose said she asked for all the bank statements related to her accounts, but the bank employees refused to provide them. On several occasions she asked to speak with the branch manager, she was told he was notin On several occasions when she went to the bank to transact business, she was told that her account had been closed and her money had been transferred to a new account because of unspecified problems with the original account. On one occasion, the new account the bank opened for her was not in her correct name, and she had great difficulty getting the bank to correct the spelling error and allow her access to her money. Ms. C estimated this occurred six or seven times over a period of between two or three years beginning in August of 2013. On one occasion she deposited a $550 money order into her checking account. She was later told that she was overdrawn on her checking account. When she questioned this, she discovered that the teller had deposited the $550 money order into a saving account that she did not even know she had. Between 2014 and 2015, Ms. C said she numerous trips to the bank to meet with the branch manager and obtain copies of her all of her bank statements. On each of these occasions, she was told the manager was not available, and bank employees refused to provide her with copies of her statements. Finally, she was able to meet with the branch manager. He promised to provide her with copies of her statements, but she’s still waiting. at this point, Ms. C is still unsure exactly how many accounts might have been opened in her name. Ms. C said she has also received three or four sets of credit/debit cards for various Wells Fargo accounts, and she also received a letter thanking her for signing up for “online” banking. According to Ms. C, 7 Statement of Probable Cause she has never requested credit cards, nor did she ever sign up for online banking. (Ms. C is 74 years of age.) on 09/30/16, I spoke with Ms. D, Monrovia, CA. Ms. Martinez told me that she has never had any accounts with Wells Fargo Bank. She was a 23-year employee with Bank of America and has her accounts with that institution. She left BoA approximately one year ago. Her last position with BoA was as a member of the quality control unit. Ms. D told me that she is engaged. Her fiancé has a business checking account with Wells Fargo, and she has access to the account. Ker fiancé also has two children, and has a small saving account for each of the children at Wells Fargo. In April of 2014, Ms. D said her fiancé whet into their local wells Fargo branch to obtain a new card. while he was there, the teller asked him about the checking and saving accounts each of his sons had with their mother. When he enquired further, the teller told him that each of his sons had checking and saving accounts account linked to his business account, and in both their names and their mother’s name, Mr. D. After learning of this from her fiancé Ms. D stated that she contacted the bank to find out about the accounts. The bank employees provided her with the same information, which was that she (Mrs D) and her fiancé's children each had two accounts, and that she (Mrs. D) was listed as their mother. Ms. D said she was not the children’s mother, and she never opened any accounts in their names. She asked the bank to close the accounts. she did not know what the source of the money in the children’s account was, but she assumed that it had probably been transferred from her fiancé’s business account. She also told me that shortly after this, the children and she received ATM cards lined to the now closed accounts in the mail and also received a letter stating that she had been sign up for online banking for the boys’ accounts. Conclusions: I believe based upon the above information, and the statements of witness(es) contained in the Hobbs attachment, that there is probable cause to believe that employees of Wells Fargo Bank unlawfully accessed the bank’s computer system to obtain the PIT of customers. The bank’s employees then used the unlawfully obtained customers’ PII to commit false impersonation and identity theft by opening unauthorized accounts, credit cards, and various other Statement of Probable Cause products that resulted in the accumulation of fees and charges for Wells Fargo. I am requesting the identity of all California customers, their account information, and a listing of any account, credit card, life insurance or any other product that have been identified by Wells Fargo as being created or issued for the Customer without the Customer’s Consent between May 2011 and July 2015. Additionally, I am requesting an accounting of all fees incurred that are associated to these account, credit card, life insurance, or other products that was created or issued for the Customer without the Customer’s Consent. I am also aware that this activity is the result of improper sales practices occurring between May 2011 and July 2015. I am further requesting the identity of the Wells Fargo agents and the location of their branches or work place that created the above accounts. Because this appears to have been systemic problem within Wells Fargo we are further requesting the identity of the managers of the identified employees that opened or created the above requested non-consensual accounts. This would include branch managers, area managers and regional managers. In my training and experience, I am aware that business associates communicate together via phone calls, text messages, emails, and social network posts. These communications often contain direct and indirect statements about customer account activity. I am seeking all communications concerning the above requested accounts or referencing the creation, maintenance, closing, or subsequent remediation of the above requested accounts. This will assist in identifying those employees and managers who opened accounts without the consent of the customer. Also, the above records will assist in identify those individual responsible for creating these non-consensual accounts without the knowledge of or consent of the account holder and the scope of monetary loss. Special Instructions: As required by California Penal Code section 1546.1 (d): Any information obtained through the execution of this search warrant that is unrelated to the objective of this search warrant shall be sealed and shall not be subject to further xeview, use, or disclosure absent an order from the Court. I further request pursuant to Penal Code Section 1546.1(d) (3) and Evidence Code section 1560 (f) that Wells Fargo provide a Certificate of Authenticity letter, that complies with the requirements set forth Statement of Probable Cause in Section 1561 of the Evidence Code, to verify the authenticity of the records produced. on of Service of the Search Warrant: A search warrant for the produ records from Wells Fargo is generally served upon a branch office. Senior Assistant Attorney General Robert Morgester has been in contact with Wells Fargo pertaining to this warrant. Per Morgester, Wells Fargo is requesting email service to expedite this request. They requested that the warrant be served on Production of records in electronic form: Financial crime investigations typically involve analyzing transaction activity. where the bank retains records of such activity in electronic form in databases, law enforcement can make more efficient use of those records if they are provided in the electronic format that the bank retains them. This means banks do not have to create age or paper copies where the data is already stored electronically. We are requesting that these records be produced in electronic format unless they only exist in paper form MALL TAL LTD LAAT DL 10 Hobbs Attachment Court order IT IS ORDERED THAT: the portion of the search warrant affidavit identified as the “Hobbs Attggfiment” be sealed and maintained in a manner that complies with gffriles or procedures promulgated by the Los Angeles Superior Coyrj/ until further order of this court or any competent court

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