Adviser admits pocketing $13M from would-be Facebook investors

A Florida investment adviser has pleaded guilty in a $13 million US securities fraud scheme that prosecutors say capitalized on enthusiasm for Facebook shares.

Florida man pleads guilty to securities fraud

A Florida investment adviser admitted in a U.S. court on Tuesday that he pocketed $13 million from 120 investors who thought he was using it to buy Facebook shares. (Shannon Stapleton /Reuters)

A Florida investment adviser has pleaded guilty in a $13 million US securities fraud scheme that prosecutors say capitalized on enthusiasm for Facebook shares.

Craig L. Berkman entered the plea Tuesday to securities fraud and wire fraud in U.S. federal court in Manhattan. The 71-year-old Berkman was a one-time Republican Party gubernatorial candidate in Oregon.

He admits that in December 2010, about one and a half years before Facebook's much-hyped initial public stock offering, he falsely claimed to investors that he owned shares of the Menlo Park, Calif.-based company.

Prosecutors say he pocketed much of the $13.2 million he received from more than 120 investors. The government says he transferred the investors' money into his personal account rather than using it to acquire shares of Facebook. Sentencing is scheduled for Oct. 1.