Craig Berkman, a former Oregon gubernatorial candidate, pleaded guilty on Tuesday. This was after charges were filed against him with regards to an IPO scam he proposed to investors. Berkman told investors that he will be able to use their money to acquire shares in Facebook Inc prior its initial public offering last May 2012.

Berkman ran for governor in the 1994 election but failed to get elected. He admitted that he told investors that he had access to scarce pre-iPO shares of the social media giant as well as LinkedIn Corp, Groupon Inc. and Zynga Inc.

However, Berkman used investors' money to make payments to earlier investors. He also used the money he had taken to pay personal expenses including US$6 million in a personal bankruptcy case. This was stated by Assistant US Attorney, John O'Donnell during the trial in a court in New York.

Craig Berkman pleaded to one charge of securities fraud and one charge of wire fraud with a maximum sentence of 20 years imprisonment for each crime.