A former chief financial officer of Bankrate Inc. who lived in Fairfield County was given a “significant” prison sentence for accounting and securities fraud and must pay back more than $20 million.
Monroe resident Edward DiMaria was sentenced to 10 years prison followed by three years of supervised release after pleading guilty in June to conspiracy to make false statements about a public company; falsifying a public company’s books, records and accounts; securities fraud and making false statements to the SEC. DiMaria must also pay $21.23 million in restitution.
According to prosecutors, between 2011 and 2014, DiMaria and his co-conspirators carried out a complex scheme to manipulate Bankrate’s financial statement and inflate the company's earnings.
The indictment states that they engaged in “cookie jar” or “cushion” accounting, where more than a million dollars in unsupported expense accruals were left on Bankrate’s books and selectively reversed in later quarters to meet earnings goals.
Additionally, DiMaria admitted to misrepresenting certain company expenses as “deal costs” to artificially inflate public reported earnings, making “materially false statements to conceal the improper accounting entries from Bankrate’s auditors, shareholders and investors."
In total, DiMaria admitted that the scheme caused more than $25 million in losses to Bankrate’s shareholders. Hyunjin Lerner, Bankrate’s former vice president of finance, previously pleaded guilty for his role in the conspiracy and was sentenced earlier this year to 60 months in prison.
“The consequences of this type of financial fraud scheme are far-reaching, affecting not only the economy in the United States, but also the world’s financial markets,” Criminal Investigations Group Inspector in Charge Daniel Adame of the U.S. Postal Inspection Service said.
“Those who engage in this type of abuse of power while in positions of authority should know they cannot escape detection. They will be found and they will be held accountable for their actions. The U.S. Postal Inspection Service has a long history of investigating complex financial fraud schemes, like this one, in order to protect investors and the integrity of the financial marketplace.”
In a statement, Assistant U.S. Attorney General Brian Benczkowski stated said, “While serving as Bankrate’s CFO, Edward DiMaria blatantly manipulated the company’s publicly reported financial statements by repeatedly lying and directing others to lie to auditors, regulators, and shareholders.
"The significant sentence handed down today underscores the serious nature of corporate fraud and the damage it causes to shareholders and to the public’s trust in our financial markets.”
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