Monroe CFO Pleads Guilty to $25 Million Fraud

MONROE, CT -- The former chief financial officer of Bankrate Inc., a publicly traded financial services and marketing company formerly headquartered in North Palm Beach, Florida, pleaded guilty Thursday for his role in orchestrating an accounting and securities fraud scheme that caused more than $25 million in shareholder losses.

Edward J. DiMaria, 53, of Monroe pleaded guilty om June 28 to one count of conspiracy to make false statements to a public company’s accountants, falsify a public company’s books, records and accounts, and commit securities fraud; and one count of making materially false statements to the Securities and Exchange Commission (SEC). DiMaria pleaded guilty before U.S. Magistrate Judge Simonton of the Southern District of Florida. DiMaria is scheduled to be sentenced on Sept. 11.

“Edward DiMaria used his position as Bankrate’s CFO to inflate the company’s earnings and mislead shareholders, auditors, and the SEC, resulting in over $25 million in losses to innocent investors,” said Acting Assistant Attorney General Cronan P. Cronan of the Justice Department’s Criminal Division. “DiMaria’s conviction and the restitution in this case will hopefully provide some solace to Bankrate’s shareholders, while also reminding potential bad actors of the Department’s commitment to hold individuals accountable for their involvement in complex accounting and securities fraud schemes that harm investors and undermine our markets.”

As part of his guilty plea, DiMaria admitted that between 2010 and 2014, he directed and conspired to commit a complex scheme to artificially inflate Bankrate’s earnings through so-called “cookie jar” or “cushion” accounting, where millions of dollars in unsupported expense accruals were purposefully left on Bankrate’s books and then selectively reversed in later quarters to boost earnings. In addition, DiMaria admitted that he conspired with other Bankrate employees to misrepresent certain company expenses as “deal costs” in order to artificially inflate publicly reported adjusted earnings metrics. DiMaria also admitted that he made materially false statements to Bankrate’s independent auditors to conceal the improper accounting entries, and that he caused Bankrate’s financial statements filed with the SEC to be materially misstated.

DiMaria further admitted that the scheme caused more than $25 million in losses to Bankrate’s shareholders. Pursuant to the terms of the plea agreement, DiMaria is required to pay approximately $21 million in restitution to Bankrate’s shareholders.