Former Ore. GOP chair arrested on multi-million dollar fraud charges

Former Ore. GOP chair arrested on multi-million dollar fraud charges
An undated file photo of Craig Berkman

PORTLAND, Ore. -- The Securities and Exchange Commission on Tuesday charged high-profile former Oregon financier Craig Berkman with defrauding investors who wanted to buy coveted pre-IPO shares of Facebook and other social media companies.

Berkman, 71, has also been arrested on criminal charges of securities fraud, according to a news release from the U.S. Attorney's Office for the Southern District of New York.

He has been charged with two counts of securities fraud and two counts of wire fraud. He faces a maximum of 20 years in prison on each of the four counts. He could be fined as much as $5 million or twice the gain on the securities fraud charges, as well as fines for the wire fraud charges.

The criminal complaint alleges that Berkman received at least $8 million for shares of Facebook that he did not own or control. He was arrested at his Odessa, Fla., home on Tuesday morning.

The SEC alleges Berkman fraudulently raised at least $13.2 million from 120 investors.

"Berkman blatantly capitalized on the market fervor preceding highly anticipated IPOs of Facebook and other social media companies to fleece investors whose cash flow he treated like an ATM to fund his own living expenses and pay court-ordered claims to victims of his past misdeeds,” said Andrew M. Calamari, director of the SEC’s New York Regional Office, in a news release.

Berkman previously managed some of Portland's largest investment funds. He was found guilty of taking money from investors, breaching their contracts and breaching his fiduciary duty in 2008. He moved to Florida after the resulting judgment forced him into bankruptcy. He is also a former chair of the Oregon Republican Party.

The Portland Business Journal is a KATU News partner.