Yesterday, Wells Fargo & Co. (NYSE:WFC) – America’s third-largest bank by assets and one of the “Big Six” too big to fail banks – got hit with a $190 million fine from the Consumer Financial Protection Bureau.

This isn’t surprising. In fact, big banks get hit with hefty fines for shady activity all the time.

But yesterday’s judgment against Wells Fargo is different. And the reason why is downright disturbing.

What happened at Wells Fargo is an indication that the corrupt culture of big banksters is so pervasive that it infects everyone, from the billionaires at the top all the way down to salespeople on the bottom rung of the corporate ladder.

Today, I want to take a close look at Wells Fargo’s latest misstep, and contrast it with some other big bank skullduggery to show you just how different this scheme is than what we’ve seen in the past – and why that’s a huge problem.

Let’s take a look…

Bankers Gonna Bank

We’ve been around this particular block many, many times here at Insights & Indictments. Too many to count.

A bank misbehaves, gets caught, incurs a fine that amounts to a slap on the wrist, then goes back to testing the limits of government regulation and the reach of government power around the world.

As many of you know, Deutsche Bank (DB) (which I recently called the world’s most dangerous bank) is one of the absolute worst offenders. Since 2008, DB has paid more than $9 billion in fines and settlements to government regulators in the U.S. and Europe.

You might be thinking that $9 billion sounds a lot like government overreach. And normally, I’d be right there with you.

But DB has been the undisputed king of corruption, and has been caught scheming to manipulate the price of gold and silver, defrauding mortgage companies, and violating U.S. sanctions by trading in Iran, Syria, Libya, Myanmar, and Sudan. DB was also punished to the tune of $2.5 billion for its role in manipulating the London Interbank Offered Rate, or LIBOR, which is the interest rate that banks charge one another

And while DB is the king of corruption, we can’t forget HSBC, which has a long and ignominious rap sheet of its own. HSBC has paid billions of dollars to settle allegations of money laundering and mortgage-market irregularities. It’s paid upwards of $10 billion in civil penalties relating investigations of global forex-market manipulation. And it’s under constant scrutiny and investigation for aiding and abetting tax evaders around the globe.

But, as I said, the situation at Wells Fargo was different.

The corrupt culture club this time wasn’t a handful of top executives plotting to ruin the economy for their personal benefit, or a gang of top traders manipulating foreign exchange fixings, LIBOR, or screwing clients on derivatives trades to fatten bonus pools.

This time, it was 5300 sales employees and their managers who were caught emulating their scheming bosses.

If this isn’t prima facia evidence that banks breed corrupt cultures, then pigs can fly.

Here’s what happened…

What Went Down at Wells

Wells Fargo, considered a consumer-friendly, mostly plain-vanilla big bank is big into cross-selling clients and customers services the bank offers.

Cross-selling is big business. It’s cheaper, by a long shot, to cross-sell an existing customer on a new service, like a mortgage, or a business credit line, a deposit account, or a credit card account, than it is to bring in brand new customers.

Bank sales employees are “incentivized” to get customers to buy into new products.

In fact, at Wells Fargo, incentive bonuses for successfully cross-selling products can be anywhere from 3% of an employee’s salary to 15%, and sometimes more. So it’s a nice “bump” if you can get it.

Well, it turns out that 5300 Wells Fargo employees, or about 2% of the bank’s workforce, figured out how to make those cross-selling bonuses a reality.

Frighteningly, and criminally in my opinion, the bank’s customers weren’t aware they were in on the deal.

From 2011 through 2014 bank employees opened up two million new product accounts on behalf of thousands of bank customers who had no idea bank employees were setting up unauthorized accounts by creating false PINS, using made-up emails and phone numbers, and falsifying signatures.

Among other accounts, the army of 5300 opened 1.5 million deposit accounts and 565,000 credit card accounts. They even illegally transferred money between accounts to make the new accounts look legitimate.

It’s not surprising that they got caught. After all, sooner or later customers were going to complain they were getting charged fees for accounts they never opened.

What’s surprising is the scam went on nationwide. It was systemic!

Wells Fargo, back in 2013, when the first allegations of this fraud were reported in the Los Angeles Times, denied it completely. Of course, the crimes were too big and pervasive to hide and the criminal activity was eventually weeded out.

That’s how we know there were 5300 employees fired over the bonus-bump scheming.

The announcement yesterday that Wells Fargo would have to pay a $190 million fine, $100 million to the Consumer Financial Protection Bureau, $50 million to Los Angeles County, and $35 million to the Office of the Comptroller of the Currency, shocked everyone, especially Wells Fargo customers, who had no idea what the bank’s culture had become.

The Hard Questions

So, how is it that an enterprise as large as Wells Fargo, which employs over 260,000 people, could have created an across the country culture of criminality?

Is it that banks are a breeding grounds for greedy, money-grabbing criminals, or is the incentive system a recipe for criminal behavior?

I don’t think either get it quite right.

What if the bad behavior at so many banks was the result of top management’s bad behavior?

What if the top brass of these perpetually scheming criminal enterprises foster a culture of greed at all costs, at any cost?

That’s where culture begins and emanates from – the top. For decades now, bank employees have watched – just as we have – their top executives show blatant disregard for their customers, their country, and the global economy while lining their own pockets. Why wouldn’t they do the same?

But… what if there was personal responsibility at the top?

What if all bank criminals went to jail, especially all the top criminals who foster the corrupt culture club?

Would that be too much to ask?