Wells Fargo Bank agreed to pay a total of approximately $72.6 million in a civil fraud settlement with the United States to resolve allegations the financial institution fraudulently overcharged hundreds of commercial customers who used the bank’s foreign exchange (FX) services.

Under the settlement agreement, approved Monday by U.S. District Judge John Koeltl for the Southern District of New York, Wells Fargo will pay approximately $35.3 million collectively in restitution to the customers it defrauded and approximately $37.3 million in civil penalties under the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) and as asset forfeiture.

A whistleblower brought the case to the government’s attention by filing a confidential declaration with the Department of Justice under FIRREA.

Among the FX services Wells Fargo offered were converting customers’ U.S. dollars into foreign currency for outgoing wire transfers and converting incoming wire transfers of foreign currency into U.S. dollars.

As alleged in the government’s complaint, from 2010 through 2017, Wells Fargo FX sales specialists defrauded 771 commercial customers—many of them small- or medium-sized businesses and federally insured financial institutions—by “marking up the prices on currency it was selling and marking down the prices on currency it was buying from customers for their outgoing and incoming wire transfers.”

Wells Fargo employees referred internally to this practice as a “spread” or “sales margin.”

As a result of the misconduct, “Wells Fargo received millions of dollars from customers to which the bank was not entitled,” the complaint stated. As part of the settlement, Wells Fargo admitted and accepted responsibility for much of the conduct alleged in the government’s complaint, including the specific schemes described below.

‘Big figure trick’: FX sales specialists would switch digits in the price of transactions to cost customers more money. “For example, if the correct hypothetical price to purchase a Euro was 1.0123 dollars, an FX sales specialist would use the big figure trick to switch the price to 1.0213 dollars, thus taking more spread … from the customer,” the government explained. If caught, the FX sales specialist would claim the digits had been mistakenly adjusted.

‘User-based pricing’: FX sales specialists “charged the same customers different spreads depending on which representative of the customer happened to be involved in executing the trade,” according to the government. Larger spreads would be charged on transactions requested by representatives “thought to be less sophisticated or experienced in FX trading.”

‘BSwift Piñata’: Wells Fargo generally did not immediately notify customers when they received incoming wires of foreign currency, known as “BSwifts,” or when those wires were converted. As a result, “the FX sales specialist could wait until the end of the day and cherry-pick the best rate for the bank and the worst rate for the customer from the entire trading day,” the complaint alleged.

Wrongdoing incentivized: FX sales specialists had their bonuses tied exclusively to revenue generated from FX transactions, the complaint stated. “Specifically, before 2017, Wells Fargo paid bonuses to FX sales specialists based upon the percentage of the FX sales revenue that each FX sales specialist and FX desk generated.” This resulted in hundreds of thousands of dollars in bonuses to various FX sales specialists, some of whom received bonuses exceeding $1 million in a single year, according to the complaint.

Compliance failures: Wells Fargo “failed to put any meaningful or effective safeguards in place” to ensure FX sales specialists did not engage in illicit practices, according to the government. For example, Wells Fargo “had no meaningful or effective policies or procedures governing how fixed-pricing agreements should be negotiated, memorialized, recorded, or implemented.” Nor did it have any “meaningful or effective process to systematically track the existence or terms of fixed-pricing agreements.”

Further, the bank provided no training to FX sales specialists; had no systemic process in place to monitor whether specialists were pricing transactions in a manner that was consistent with fixed-pricing agreements; did not implement electronic safeguards to prevent specialists from pricing transactions in a manner that deviated from fixed-pricing agreements; and did not conduct any audits or reviews of transactions to determine whether pricing matched fixed-pricing agreements until 2017, the complaint stated.

Toxic culture: FX sales specialists “openly joked about and celebrated taking advantage of the bank’s customers,” according to the government. For example, some specialists “would use expressions such as ‘back the truck up,’ and ‘when in doubt, spread them out’ to jokingly describe how Wells Fargo and its FX sales specialists were making large sums at the expense of the bank’s customers.”

According to settlement documents, Wells Fargo affirmed that, beginning in 2017, it enhanced its FX policies and practices and took adverse employment actions against more than 20 employees who were involved in the FX business, including various disciplinary actions and terminations.

“This past behavior was unacceptable,” Wells Fargo said in a statement. “Since that time, Wells Fargo has paid approximately $35 million to fully remediate affected clients and extensively reviewed our FX pricing practices and procedures. We have significantly improved our business policies, procedures, and oversight related to the management and pricing of FX transactions. We remain committed to serving the needs of our FX clients.”