Former Bankrate CFO Gets 10 Years In The Slammer For Cooking The Books To The Tune Of $25 Million
Former Bankrate CFO Edward DiMaria is going to prison for 10 years. The former Bankrate CFO pleaded guilty to orchestrating a fraud scheme that caused more than $25 million in shareholder losses.
Bankrate is a publisher and news aggregator of personal finance content. The company also is a key lead generator for the financial services industry.
DiMaria pleaded guilty in June to a laundry list of securities and bank fraud allegations. He pleaded guilty to one count of conspiracy to make false statements to a public company’s accountants and falsify a public company’s records and accounts. He also pleaded guilty to one count of making materially false statements to the SEC.
DiMaria admitted that he directed and conspired to commit a complex scheme to artificially inflate Bankrate’s earnings. He used a “cookie jar” or “cushion” accounting scheme to siphon off money from the company.
Cookie Jar accounting is when unsupported expense accruals are left on a company’s books. These expenses are then selectively reversed in later quarters to boost earnings.
DiMaria also admitted that he misrepresented company expenses as “deal costs.”
Thus, artificially inflating publicly reported adjusted earnings.
DiMaria also made materially false statements to independent auditors to conceal the improper accounting entries.
Bankrate’s former vice president of finance, Hyunjin Lerner previously pleaded guilty for his role in the conspiracy. He received a sentence of 60 months in prison for the scheme.
Chief U.S. District Judge K. Michael Moore of the Southern District of Florida also imposed three years of supervised release. He also ordered DiMaria to pay restitution in the amount of $21,234,214.
Red Ventures acquired Bankrate last year in a $1.24 billion deal.