You can now read 5 articles in a month for free on BostonGlobe.com. Read as much as you want anywhere and anytime for just 99¢.

Adviser pleads guilty in $13m fraud

NEW YORK — A Florida investment adviser pleaded guilty Tuesday in a $13 million securities fraud scheme that prosecutors say capitalized on enthusiasm for shares of Facebook Inc. and other Internet companies about to go public.

Craig L. Berkman, 71, of Odessa, Fla., entered the plea to securities fraud and wire fraud in US District Court in Manhattan, agreeing to serve between eight and 10 years in prison, according to the terms of a written agreement between Berkman and prosecutors. Otherwise, he would have faced up to 40 years in prison.

Continue reading below

Berkman, a onetime Oregon GOP gubernatorial candidate, admitted that he falsely claimed to investors in December 2010 that he owned shares of Menlo Park, Calif.-based Facebook, Chicago-based Groupon Inc., and Mountain View, Calif.-based LinkedIn Inc., among other companies.

Prosecutors say he pocketed much of the $13.2 million he received from more than 120 investors during the scheme, which stretched from 2010 until his March 2013 arrest. The government says he transferred the investors’ money into his personal account rather than using it to acquire shares of Facebook.

They said he used about $6 million to pay off creditors in his personal bankruptcy and another $4.8 million to pay off earlier investors, and spent another $1.6 million on legal fees, travel, and other personal expenses, including cash withdrawals.

At a sentencing scheduled for Oct. 1, Berkman also will face restitution of $8.4 million and must forfeit $13.2 million, according to his agreement with the government.

Loading comments...
Subscriber Log In

We hope you've enjoyed your 5 free articles'

Stay informed with unlimited access to Boston’s trusted news source.

  • High-quality journalism from the region’s largest newsroom
  • Convenient access across all of your devices
  • Today’s Headlines daily newsletter
  • Subscriber-only access to exclusive offers, events, contests, eBooks, and more
  • Less than 25¢ a week
Marketing image of BostonGlobe.com
Marketing image of BostonGlobe.com
Already a subscriber?
Your city. Your stories. Your Globe.
Yours FREE for two weeks.
Enjoy free unlimited access to Globe.com for the next two weeks.
Limited time only - No credit card required!
BostonGlobe.com complimentary digital access has been provided to you, without a subscription, for free starting today and ending in 14 days. After the free trial period, your free BostonGlobe.com digital access will stop immediately unless you sign up for BostonGlobe.com digital subscription. Current print and digital subscribers are not eligible for the free trial.
Thanks & Welcome to Globe.com
You now have unlimited access for the next two weeks.
BostonGlobe.com complimentary digital access has been provided to you, without a subscription, for free starting today and ending in 14 days. After the free trial period, your free BostonGlobe.com digital access will stop immediately unless you sign up for BostonGlobe.com digital subscription. Current print and digital subscribers are not eligible for the free trial.