Republican Politician Admits to $13M Securities Fraud

MANHATTAN (CN) - Former Oregon Republican Party State Chairman Craig Berkman faces 8 to 10 years in federal prison after pleading guilty to $13 million securities frauds in the Facebook, GroupOn and other IPOs, federal prosecutors said.

Berkman, 71, of Odessa, Fla., pleaded guilty Tuesday to securities fraud and wire fraud. He admitted that he lied to investors, telling them he owned more pre-IPO shares of Facebook and other tech companies than he actually did.

He made more than $13 million from the scheme and spent it on himself, prosecutors said: $6 million to bankruptcy creditors, $4.8 million in Ponzi payments, and $1.6 million on attorneys' fees and his own expenses.

Berkman will be sentenced on Oct. 1.

Berkman ran for governor of Oregon in 1994, after becoming a millionaire in high tech businesses. He also was chairman of the Oregon Republican Party.

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