A former Oregon gubernatorial candidate pleaded guilty on Tuesday to defrauding investors by claiming that he could use their money to buy shares of Facebook (NASDAQ:FB) before the company’s initial public offering.
Craig Berkman, a Republican who ran for governor in 1994, admitted he told investors he had access to Facebook, LinkedIn (NYSE:LNKD), Groupon (NASDAQ:GRPN), and Zynga (NASDAQ:ZNGA) shares before they were released on the public market, reports Reuters.
“I deeply regret my actions,” a weeping Berkman said at the hearing on Tuesday. “I’ve devastated my family.” He apologized to his investors, saying some of them were “dear, dear friends.”
Rather than investing in the companies before their IPO, Berkman used investor money to pay off other investors — also called a Ponzi scheme — in addition to paying off personal expenses, including a $6 million fee in a personal bankruptcy case.