Former Bankrate CFO pleads guilty in scheme

A former chief financial officer of Bankrate Inc. admitted to lying to investors in a scheme that cost shareholders more than $25 million, federal prosecutors said last Thursday.

Edward J. DiMaria, 53, of Connecticut, pleaded guilty to crimes that include lying to a public company’s accountants and to the Securities and Exchange Commission.

DiMaria entered the guilty plea in federal court in the Southern District of Florida. The deal requires him to pay $21 million in restitution to Bankrate shareholders. He is scheduled to be sentenced Sept. 11.

DiMaria was CFO of Bankrate, on online publisher of personal finance content, while it was a publicly traded company headquartered in North Palm Beach.

DiMaria admitted that between 2010 and 2014 he artificially inflated Bankrate’s profits through what prosecutors call “cookie jar” or “cushion” accounting. He left millions of dollars in expense accruals on Bankrate’s books. Then, if the company seemed in danger of missing its profit goals, DiMaria reversed the expense accruals to boost earnings. DiMaria also acknowledged misrepresenting certain company expenses as “deal costs” to inflate earnings.

In 2013, his last full year with Bankrate, DiMaria was paid a salary of $412,019.

Bankrate acknowledged in 2014 that the SEC was scrutinizing its accounting practices, and DiMaria resigned. At the time, Bankrate warned that its financial statements from 2011, 2012 and 2013 “should no longer be relied upon.”

Shares of Bankrate fell as much as 18 percent in the hours after the company dropped that bombshell on investors. The company later said it would pay $15 million to settle the SEC’s civil case.

The accounting scandal brought immediate investor suits, but it wasn’t until late 2017 that federal prosecutors formally charged DiMaria.