Berkman Pleads Guilty To Facebook IPO Stock Scam

Facebook has been pleaded guilty by a former Oregon gubernatorial candidate in a $13 million securities scam to sell pre-IPO shares, before the social network went public.

A Florida financier, Craig Berkman, aged 71, who was a governor in 1994 pleaded guilty on Tuesday in U.S. District Court, Manhattan to one count of securities, each of which carries a maximum sentence of 20 years in prison.

It has been reported from prosecutors that Berkman cheated more than 120 investors out of $13.2 million with promises of an early shot at the highly coveted shares. He was caught for false admission to investors that he has access to shares of other tech companies, including LinkedIn, Groupon, and Zynga.

Prosecutors said that Berkman was arrested in March after a Securities and Exchange Commission investigation, used the proceeds from Ponzi-like scheme to pay off debts and fund personal expenses, including $6 million in a personal bankruptcy case.

US attorney Preet Bharara stated after the announcement of plea, “Through various misrepresentations, Craig Berkman enticed investors with highly coveted investment opportunities, and then swindled them out of millions of dollars, using much of it for his personal benefit”. He agreed to the prosecutors, as part of the plea agreement that he had forfeited $13.2 million the scheme produced.

According to Reuters, Bekman wept and was telling U.S. Magistrate Judge Kevin Nathaniel Fox that he is deeply regretting for his actions. He said, “I devastated my family. I apologize to them and to the investors, some of whom were dear friends. I’m very, very sorry.”

Fox scheduled the sentence of Berkman on October 1

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