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Oregon politician gets six years for Facebook IPO fraud

17
Dec
2013

By Joseph Ax NEW YORK (Reuters) – A former candidate for governor of Oregon was sentenced to six years in prison on Monday for fraudulently convincing investors he had access to shares of Facebook Inc before its highly anticipated initial public offering in 2012. Craig Berkman, who ran unsuccessfully for governor in 1994 as a Republican, told investors he would use their money to buy pre-IPO shares in Facebook and other companies like LinkedIn Corp, Groupon Inc and Zynga Inc. Instead, he used new investor money to pay off earlier investors and to fund his own expenses, including nearly $6 million to help satisfy a settlement with a firm that accused him of failing to pay his debts, U.S. authorities said. “I am sincerely sorry, and I take full responsibility for the negative consequences of my behavior,” Berkman told U.S. District Judge Shira Scheindlin at his sentencing on Monday. Berkman, a businessman and the former head of the Oregon Republican Party, will also be required to make restitution of approximately $11 million, according to prosecutors.

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