Bankrate CFO sentenced to 10 year in prison


Edward DiMaria, the former CFO of Bankrate was sentenced 10 years in prison and asked to pay restitution of $21M for accounting fraud. DiMaria pleaded guilty to one count of conspiracy to making false statement’s to a public company’s accountant and one count of making materially false statement to the Securities and Exchange Commission.

In his defense DiMaria stated that the fraud did not bring down the company and amounted to only a small portion of the company’s revenue. Thats a strange defense! Federal prosecutors countered that the fraud cost the shareholders more than $25 million.

DiMaria admitted that from 2010 to 2014 he ran a scheme to artificially boost Bankrate’s earnings through “cookie jar” or “cushion” accounting. Millions of dollars in unsupported expense accruals were left on Bankrate’s books and then reversed in later quarters to inflate earnings. DiMaria called the cookie jar accounting an incremental smoothing of earnings!

 

 

Big 4 collusion conspiracy

Italy’s Antitrust authority fined the big 4 (Ernst & Young, Deloitte, KPMG and PWC) a total of 23 million euros for allegedly conspiring and colluding to divvy up large public consultancy contracts. Looks like the Big 4 need to revise their Ethics class!

Embezzlement report by Hiscox

According to a recent study by global specialty insurer Hiscox, in 2016, workplace embezzlement cases cost companies an average of $1.13million. Some very interesting facts from the report

55% of cases occurred at companies with fewer than 100 employees
37% of cases committed by someone in finance and accounting
30% of cases occurred in financial services or government sectors
37% of cases involved losses of > $500,000 and 23% of cases involved losses of > $1million
28.7% schemes lasted greater than 5 years
51% of perpetrators were women
Median age of perpetrators is 48

Definitely an interesting read.