NEW YORK (AP) — A 71-year-old Florida investment adviserand onetime Oregon gubernatorial candidate
cried as he apologized Mondaybefore being sentenced to six years in prison in a $13 millionsecurities fraud
scheme that prosecutors say capitalized on enthusiasmfor shares of Facebook and other Internet companies
about to go public.CraigL. Berkman of Odessa, Fla., was sentenced by U.S. District Judge ShiraA. Scheindlin,
who called his crime "surely despicable" and"particularly egregious" because it was a
sophisticated financial fraudhe created to try to pay off the losses of an earlier first fraud.Still,the
Republican party chairman for Oregon from 1989 to 1993 pledgedthrough tears to dedicate the rest of his life
after prison to teamingwith former contacts in the business world to make enough money to makewhole 120
investors who lost money in the scheme between October 2010and March of this year.Berkman had made millions
of dollars bycreating and selling high-tech companies before the dot-com bust and the2008 financial collapse
sent him on a desperate course to regainwealth."I panicked, compromising my integrity and
principles," he said."Iexpect to pay 100 percent of the restitution ordered by the court,"
hesaid shortly before Scheindlin ordered him to forfeit $13.2 million andpay a fine of at least $8.4
million.Of his victims, he said: "It is my hope they will understand the depth of my
remorse."Thejudge, though, rejected his defense lawyer’s request that he besentenced to two years in
prison, saying she was "concerned that withoutsignificant punishment this behavior would only be
repeated."Noting he had once made millions, she said: "Apparently, it just wasn’t enough for
him."Prosecutors had requested she sentence him to between eight and 10 years in prison.Thesentencing
follows Berkman’s June plea to securities fraud and wirefraud. He had admitted falsely claiming to investors
that he ownedshares of Menlo Park, Calif.-based Facebook Inc., Chicago-based GrouponInc. and Mountain View,
Calif.-based LinkedIn Inc., among othercompanies. He told investors their money would be used to buy shares
ofcompanies before their initial public offerings.As she announcedthe sentence, Scheindlin said Berkman’s
story of success turned tofailure was "not very compelling." She said he used some of the
moneyfrom the second fraud to pay back investors ripped off by his firstfraud, but then also spent the money
on gifts for his third wife andstepchildren. She noted that two grown daughters from his first marriagewant
nothing to do with him.Berkman admitted during his pleathat he used close to $6 million to pay creditors in
a bankruptcyproceeding even though he had falsely promised that the source of thefunds paid was not investor
funds that he controlled.Prosecutorssaid he used another $4.8 million to pay off earlier investors and
spentanother $1.6 million on legal fees, travel and other personal expenses,including cash
withdrawals.Copyright 2013 The Associated Press. All rightsreserved. This material may not be published,
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