NEW YORK — A 72-year-old Odessa investment adviser and onetime Oregon gubernatorial candidate cried as he apologized Monday before being sentenced to six years in prison in a $13 million securities fraud scheme that prosecutors say capitalized on enthusiasm for shares of Facebook and other Internet companies about to go public.
Craig L. Berkman was sentenced by U.S. District Judge Shira A. Scheindlin, who called his crime "surely despicable" and "particularly egregious" because it was a sophisticated financial fraud he created to try to pay off the losses of an earlier first fraud.
Still, the Republican party chairman for Oregon from 1989 to 1993 pledged through tears to dedicate the rest of his life after prison to teaming with former contacts in the business world to make enough money to make whole 120 investors who lost money in the scheme between October 2010 and March of this year.
Berkman had made millions of dollars by creating and selling high-tech companies before the dot-com bust and the 2008 financial collapse sent him on a desperate course to regain wealth.
"I expect to pay 100 percent of the restitution ordered by the court," he said shortly before Scheindlin ordered him to forfeit $13.2 million and pay a fine of at least $8.4 million.
The judge rejected his defense lawyer's request that he be sentenced to two years in prison, saying she was "concerned that without significant punishment this behavior would only be repeated."
The sentencing follows Berkman's June plea to securities fraud and wire fraud. He had admitted falsely claiming to investors that he owned shares of Facebook Inc., Groupon Inc. and LinkedIn Inc., among other companies. He told investors their money would be used to buy shares of companies before their initial public offerings.