The former chief financial officer of a major financial news publication that provides consumers with mortgage data has admitted to accounting fraud.
Bankrate.com publishes rates for consumers to compare financial products including depository accounts, credit cards and personal loans.
In addition, the New York-based company provides rate comparisons and forecasts for single-family residential loans and home-equity loans.
Edward J. DiMaria previously served as CFO at Bankrate Inc.
An announcement Thursday from the Department of Justice alleges that between 2010 and 2014, DiMaria defrauded investors of the company through “cookie jar” or “cushion” accounting.
Here’s how it worked.
DiMaria, 53, would create  millions of dollars in unsupported expense accruals in one quarterly period then reverse the accrual in subsequent periods to make it appear that earnings were rising.
In addition, he worked with other Bankrate employees to misrepresent some expenses as “deal costs” to artificially inflate publicly reported adjusted earnings metrics.
As part of the alleged fraud, DiMaria lied to the company’s independent auditors — causing filings with the Securities and Exchange Commission to be false.
More than $25 million in losses were allegedly suffered by investors as a result of DiMaria’s actions.
The Justice Department said DiMaria pled guilty on Thursday. It’s the second guilty plea following the plea of Bankrate’s former vice president of finance, Hyunjin Lerner, who was sentenced to five years in prison earlier this year.
DiMaria is scheduled to be sentenced on Sept. 11 before U.S. Magistrate Judge Simonton in U.S. District Court for the Southern District of Florida.
