NEW YORK (AP) — A Florida investment adviser was charged Tuesday in an $8 million securities fraud scheme that federal prosecutors say capitalized on enthusiasm for Facebook shares.
Craig L. Berkman was arrested at his home in Odessa, Fla., and held after a court appearance in Tampa until a hearing Thursday.
The 71-year-old businessman was charged with two counts each of securities fraud and wire fraud, accused of claiming to own Facebook shares before the company went public in May when he didn’t directly own shares.
Prosecutors said he pocketed much of the $8 million he received from more than 50 investors. If convicted, he could face up to 80 years in prison.
Prosecutors said Berkman, a one-time Oregon GOP gubernatorial candidate, falsely claimed to investors in December 2010 that he owned shares of Menlo Park, Calif.-based Facebook Inc.
The claims caused investors to send about $5.5 million to various accounts controlled by Berkman, the government said.
Rather than use investor money to acquire shares of Facebook, he misappropriated a large portion of it for his own benefit and the benefit of others, prosecutors said.