Craig Berkman Pleaded Guilty For Defrauding Investors In Tech Stock Scheme
Craig Berkman is a former Oregon gubernatorial candidate that scammed investors by convincing them that he could use their money to buy Facebook, LinkedIn, Groupon, and Zynga shares before the companies went public. Berkman is a Republican that run for governor in 1994 and he admitted in court that he had access to scarce pre-IPO shares of the tech companies. He ended up taking that money and made payments to earlier investors and for his own personal expenses, also known as a Ponzi scheme. Part of these payments went to a $6 million personal bankruptcy case from his past.
Berkman pleaded guilty to one charge of securities fraud and one charge of wire fraud. Berkman apologized to his investors and added that many of them were his “dear, dear friends.” A sentencing is set for October 1st. Berkman agreed to forfeit $13.2 million that he raised from over 120 investors. Berkman was arrested in his home in Odessa, Florida.
Another man named John Mattera committed the same type of fraud. He scammed investors of $13 million by telling them that he would invest in Facebook pre-IPO. He was sentenced to jail for 11 years on June 21st, according to Reuters. Back in 2008, an Oregon jury found Berkman was liable in a private action for breach of fiduciary duty, conversion of investor funds, and misrepresentation to investors based on his involvement with a firm called Synectic Ventures.
Berkman’s case was filed under U.S. v. Berkman, U.S. District Court, Southern District of New York, No. 13-mg-00732.