Former Vice President of Finance at Publicly Traded Company Charged with Accounting and Securities Fraud Scheme
A former vice president of finance for Bankrate Inc., a publicly traded financial services and marketing company headquartered in New York City, was charged in an indictment filed yesterday for his alleged participation in a complex accounting and securities fraud scheme.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Benjamin Greenberg of the Southern District of Florida and Chief Postal Inspector Guy J. Cottrell of the U.S. Postal Inspection Service (USPIS) made the announcement today.
Hyunjin Lerner, 48, of Martin County, Florida, was charged in an indictment filed in the Southern District of Florida with one count of conspiracy to commit wire fraud, falsify a public company’s books, records and accounts and make false statements to a public company’s accountants; three counts of wire fraud; one count of securities fraud; four counts of false entries in a public company’s books, records and accounts; and three counts of false statements to a public company’s accountants. Lerner, who previously worked at Bankrate’s offices in Palm Beach Gardens, Florida, made his initial appearance earlier today before U.S. Magistrate Judge John J. O’Sullivan of the Southern District of Florida and was released on bond.
The indictment alleges that between 2011 and 2014, Lerner 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, Lerner and his co-conspirators allegedly engaged in “cookie jar” or “cushion” accounting, meaning unsupported expense accruals were left on Bankrate’s books and then selectively reversed in later quarters to meet earnings goals. In addition, Lerner and his co-conspirators allegedly: misrepresented certain company expenses as “deal costs” in order to artificially inflate publicly reported adjusted earnings metrics; booked hundreds of thousands of dollars in unsupported revenue to further inflate Bankrate’s reported revenue and earnings; and made materially false statements to conceal the improper accounting entries from Bankrate’s auditors, shareholders and the investing public.
An indictment is merely an allegation and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The USPIS Washington, D.C., Division investigated the case. Assistant Chief Henry Van Dyck and Trial Attorneys Rush Atkinson, Emily Scruggs and Somil Trivedi of the Criminal Division’s Fraud Section are prosecuting the case. The Securities and Exchange Commission and the U.S. Attorney’s Office of the Southern District of Florida provided assistance in this matter.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.