(The Los Angeles Times)

MALIBU COLONY -- Wells Fargo has fired a bank executive over the use of a foreclosed $12 million Malibu home for weekend parties, saying the activity violated company policy.

The home in the gated Malibu Colony, once owned by Lawrence and Linda Elins, was repossessed by Wells Fargo last May.

The former owners were devastated by the Madoff scandal and signed over the property to the bank to satisfy larger debts, according to their real estate agent Irene Dazzan-Palmer.

Neighbors became suspicious when they say they saw someone living inside the home and hosting eye-catching parties. Wells Fargo also reportedly rejected offers to show the house to prospective buyers.

Residents later identified the house's occupant as 39-year-old Cheronda Guyton, a Wells Fargo senior vice president who is responsible for foreclosed commercial properties.

Wells Fargo bank spokeswoman Jennifer Langan confirmed Monday the employee was Chronda Guyton.

Wells Fargo released this statement:

"An internal investigation has concluded a single team member was responsible for violating our company policies."

"As a result, employment of this individual has been terminated. We deeply regret the activities that have taken place as they do not reflect the conduct we expect of our team members. We continue to place the highest value on honesty, trust and integrity to guide our team members in making business decisions each day."

Bank officials said the company's ethics code prohibits employees from making personal use of property that had been surrendered to satisfy debts.

In a statement last week, the bank apologized for "the disruption to the neighboring property owners since these allegations were made."

Madoff was sentenced in June to 150 years in prison for running a multi-billion dollar Ponzi scheme that devastated thousands of investors, including celebrities.