(Bloomberg) — Seven years ago, Wells Fargo & Co.’s security chief opened a few “undercover” bank accounts to aid law enforcement. Within 24 hours, two employees tacked on debit cards, claiming they each personally spoke to the new — fictional — customers.“All I could do was shake my head,” the security chief told a senior executive in an email.The exchange was among dozens of behind-the-scenes moments of frustration and fear cited by U.S. regulators Thursday seeking to impose a record $59 million in fines on the bank’s former leaders for allowing sales abuses to pervade its nationwide branch network. Three settled, including ex-Chief Executive Officer John Stumpf, who agreed to be banned from the industry and pay a $17.5 million penalty — an unprecedented sanction of a former U.S. bank leader. Five others are fighting the case.The bank’s aggressive targets for opening new accounts “caused hundreds of thousands of employees to engage in numerous types of sales practices misconduct,” the Office of the Comptroller of the Currency wrote in its complaint against them.The bank’s staff confronted a stark dilemma every day for 14 years, according to the regulator: “They could engage in sales practices misconduct — much of which was illegal — to meet their goals, or they could struggle to meet their goals and face adverse consequences, including losing their jobs.”The OCC faulted Stumpf for failing “to respond to numerous warning signs.” Former chief administrative officer Hope Hardison and onetime risk chief Michael Loughlin also resolved its claims.‘Forced to Walk’The agency is looking to levy the heftiest penalty — $25 million — against former community banking chief Carrie Tolstedt. She and four other former executives — general counsel Jim Strother, chief auditor David Julian, audit director Paul McLinko and community banking risk officer Claudia Russ Anderson — are facing a public hearing before an administrative law judge. The regulator said it could decide to increase the civil penalties based on the evidence presented.An attorney for Russ Anderson didn’t respond to messages seeking comment. Representatives for the other four said the executives acted with integrity, sought to tackle problems and expect to clear their names once all of the facts are heard.The OCC laced its 100-page complaint against them with emails, internal memos and testimony, arguing that for years Wells Fargo’s management refused to ease off sales targets despite repeated warnings about abuses.“The bank had better tools and systems to detect employees who did not meet unreasonable sales goals than it did to catch employees” engaging in misconduct, the regulator said. Some were allegedly told that if they missed targets, they would be “transferred to a store where someone had been shot and killed” and if they did not make enough appointments they would be “forced to walk out in the hot sun around the block.”Gulf War StressWorkers warned bosses about the fallout of that pressure in impassioned memos.“The termination ax is suspended over our head one way or another,” an employee wrote in a complaint sent to Tolstedt’s office in 2012, according to the OCC. “Meet unreasonable goals or you will be terminated, cheat to meet the unreasonable goals and you will be terminated when caught.”“I was in the 1991 Gulf War,” another employee wrote to Stumpf’s office. “This is sad and hard for me to say, but I had less stress in the 1991 Gulf War than working for Wells Fargo.”Senior executives also heard about the trouble directly from affected customers. A former operating committee member’s wife received two debit cards in the mail that she hadn’t requested. The executive raised it with Tolstedt, who eventually told him to stop telling the story “because she thought it reflected poorly on the community bank,” the OCC wrote.The scandal erupted in September 2016, setting off a national furor. It prompted congressional hearings, Stumpf’s exit and more probes, including still-pending investigations by the Justice Department and Securities and Exchange Commission. The ire has spanned the political spectrum from Democratic Senator Elizabeth Warren to Republican President Donald Trump.The OCC previously seized unusual control over hiring and firing the bank’s leaders and, with other regulators, inflicted billions of dollars in fines and other costs on the company. But Thursday’s case was the agency’s first targeting executives over the matter. And it contrasts with the years after the financial crisis, when no CEO of a major U.S. bank was punished for faulty mortgage-bond sales and home foreclosures that upended the economy and hurt millions of Americans.Stumpf’s successor, Tim Sloan, stepped down last year after lawmakers and the agency expressed frustration with the pace of the bank’s cleanup. His replacement, Charlie Scharf, took over in October.“We are reviewing today’s filings and will determine what, if any, further action by the company is appropriate with respect to any of the named individuals,” Scharf told employees on Thursday, noting the bank won’t make any remaining compensation payments to the individuals during the review. “This was inexcusable. Our customers and you all deserved more from the leadership of this company.”To contact the reporters on this story: Hannah Levitt in New York at [email protected];Jesse Hamilton in Washington at [email protected] contact the editors responsible for this story: Michael J. Moore at [email protected], ;Jesse Westbrook at [email protected], David Scheer, Dan ReichlFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.