Former Chief Financial Officer at Publicly Traded Company Charged with Accounting and Securities Fraud Scheme
A former chief financial officer for Bankrate Inc., a publicly traded financial services and marketing company headquartered in North Palm Beach, Florida, was charged in an indictment unsealed today for his alleged participation in a complex accounting and securities fraud scheme.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Acting U.S. Attorney Benjamin Greenberg of the Southern District of Florida and Inspector in Charge Regina Faulkerson of the U.S. Postal Inspection Service’s Criminal Investigations Group made the announcement.
Edward J. DiMaria, 52, of Fairfield County, Connecticut, was charged in an indictment filed in the Southern District of Florida with one count of conspiracy to make false statements to a public company’s accountants and to falsify a public company’s books, records and accounts; six counts of false entries in a public company’s books, records and accounts; three counts of false statements to a public company’s accountants; one count of conspiracy to commit securities fraud and wire fraud; one count of wire fraud and one count of securities fraud. DiMaria, who previously worked at Bankrate’s offices in New York City, made his initial appearance earlier today before U.S. Magistrate Judge Edwin G. Torres of the Southern District of Florida and was released on bond.
“The deceptive accounting practices that Edward DiMaria allegedly engaged in can cause real financial harm to investors, along with broader reputational harm to U.S. markets and our country,” said Acting Assistant Attorney General Cronan. “Safeguarding the integrity of our markets – while holding responsible those executives who refuse to follow the rule of law – are important priorities for the Department of Justice and our law enforcement partners.”
“This type of sophisticated financial fraud scheme can have a negative impact on the financial markets in the United States and around the world,” said Inspector in Charge Faulkerson. “Anyone who engages in such conduct should know they will not go undetected and be held accountable. 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.”
The indictment alleges that between 2011 and 2014, DiMaria and his co-conspirators carried out a complex scheme to manipulate Bankrate’s financial statements and artificially inflate Bankrate’s earnings. According to the indictment, DiMaria and his co-conspirators allegedly engaged in so-called “cookie jar” or “cushion” accounting where over a million dollars in unsupported expense accruals were left on Bankrate’s books and then selectively reversed in later quarters to meet earnings goals. In addition, DiMaria and his co-conspirators allegedly misrepresented certain company expenses as “deal costs” in order to artificially inflate publicly reported adjusted earnings metrics, and made materially false statements to conceal the improper accounting entries from Bankrate’s auditors, shareholders and the investing public. The indictment further alleges that while Mr. DiMaria was misleading Bankrate’s auditors and the public about the company’s financial condition he realized millions of dollars from selling his own shares of Bankrate stock.
An indictment is merely an allegation and the defendant is presumed innocent unless proven guilty beyond a reasonable doubt in a court of law.
The U.S. Postal Inspection Service Washington, D.C. Division investigated the case. Assistant Chief Henry Van Dyck and Trial Attorneys Emily Scruggs and Jason Covert of the Criminal Division’s Fraud Section are prosecuting the case with assistance from the U.S Attorney’s Office for the Southern District of Florida. The Securities and Exchange Commission also provided assistance in this matter.