City controller: L.A. paid Wells Fargo for ‘nonexistent’ check printing

Los Angeles City Controller Ron Galperin says the city paid more than $500,000 to Wells Fargo Bank for “nonexistent services” -- charges for printing checks that the city was actually printing itself.

Galperin and his aides are demanding that the money be returned. In a letter sent last week to the city treasurer and obtained by The Times, Galperin urged that the overpaid money be recovered “as swiftly as possible.”

“It is troubling that these overbillings have occurred and remained undetected for such a long period of time,” he wrote.

Wells Fargo Wholesale Banking spokesman Gabriel Boehmer said the company was working with the city to examine the payments and had stopped the disputed charges in May “as we began to research the matter.”

“If a refund or adjustment is due to the city, we will make one, just as we would with any other customer,” Boehmer wrote in a statement emailed to The Times.

The city controller’s office scrutinized invoices and tallied up more than $500,000 in charges for printing vendor and payroll checks between February 2012 and March 2015, despite the fact that Los Angeles prints such checks using its own systems, Galperin wrote.

Galperin aides said the total amount that the city was billed for such services may be higher because the bank contract dates from 2008.

Under that contract, Wachovia Bank -- which was acquired by Wells Fargo -- was to provide a wide range of banking services, including direct deposit services, payroll tax processing and electronic receipt and payment platforms.

In his letter, Galperin urged City Treasurer Antoinette Christovale to scrutinize all Wells Fargo invoices to check for any other charges for services that the bank did not provide, to review internal controls and to “determine if similar risks exist in other contracts.”

Christovale said late Monday that her office had been working with Wells Fargo and Galperin’s office to determine how much the city had overpaid.

“Once confirmed we intend to fully recover what is due to the city,” Christovale wrote in an email. She said her staffers are still researching how the overpayments went unnoticed.

L.A. is already facing off with the bank in court: City Atty. Mike Feuer filed suit against Wells Fargo earlier this year, alleging that the bank encouraged employees to engage in “unfair, unlawful and fraudulent conduct,” including opening unauthorized accounts for customers.

At the time, Wells Fargo said it would vigorously defend itself against the accusations and that its “culture is focused on the best interests of its customers.”

In the face of the new concerns about overpayment, Galperin said in a statement Monday afternoon that the city had a long-standing relationship with Wells Fargo, and that “it is my hope that, in the spirit of that relationship, the bank will make us whole.”

Follow @latimesemily for what’s happening at Los Angeles City Hall.

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