A federal judge has sentenced the former CFO of Bankrate Inc. to 10 years in prison on Tuesday for orchestrating a securities and accounting fraud scheme. The fraud resulted in shareholder losses of more than $25 million.
Edward J. DiMaria, 53 of Connecticut originally plead guilty in June to one count of conspiracy to make false statements to a public company’s accountants and one count of making materially false statements to the Securities and Exchange Commission (SEC).
DiMaria was sentenced by Chief U.S. District Judge K. Michael Moore of the Southern District of Florida. The judge also imposed three years of supervised release. Furthermore, DiMaria will have to pay restitution of about $21.2 million.
Commenting on the sentencing, Assistant Attorney General Brian Benczkowski 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.”
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“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. The sentence also demonstrates the Department’s commitment to prosecuting corporate misconduct to the fullest extent of the law.”
DiMaria Plead Guilty on June 28, 2018
In June, when he pled guilty, DiMaria admitted that he organized and conspired to artificially inflate Bankrate’s earnings through a so-called cookie jar between 2010 and 2014. During this time, millions of dollars in expense accruals were deliberately left on Bankrate’s books. These were then reversed selectively in later quarters, resulting in a boost of earnings.
DiMaria also admitted to working with other employees to falsify company expenses as “deal costs.” This then inflated the publicly reported adjusted earning metrics of the company. From here, DiMaria lied to auditors and due to the dodgy accounting practices, the financial statements filed with the SEC were materially misstated, he admitted.
The Inspector in Charge Delany DeLeon-Colon added: “The U.S. Postal Inspection Service has an extensive history of investigating complex financial fraud schemes in order to protect investors as well as the integrity of the financial marketplace from fraudulent activities by trusted insiders who abuse their positions. Anyone who engages in this type of financial fraud scheme should know they will be found and they will be held accountable.”
Previously, the former vice president of finance at Bankrate, Hyunjin Lerner also plead guilty for partaking in the conspiracy. He was sentenced earlier this year to spend 60 months in prison by Judge Moore.