Criminal Justice

Plaintiff Who Claimed 50% Facebook Ownership Is Accused of 'Dressing Up a Fraud as a Lawsuit'


The plaintiff who claimed he was entitled to half ownership of Facebook has been charged with a scheme to defraud the social networking site and its founder, Mark Zuckerberg, through a lawsuit supported by sham evidence.

Paul Ceglia is accused of falsifying a contract and fabricating emails in his quest to prove that Mark Zuckerberg promised him half of Facebook in return for a $1,000 investment, report CNET, the New York Times DealBook blog and the Wall Street Journal (sub. req.). He has been charged with mail and wire fraud.

Ceglia’s suit had claimed Zuckerberg, then a Harvard student, promised him a Facebook stake when Ceglia hired the programmer in 2003 to help with an Internet business. Federal prosecutors say Ceglia substituted a falsified first page of their contract to support his lawsuit.

The real contract was found in a search of Ceglia’s hard drives, according to the press release posted at CNet.com. “Page one of the real contract does not refer to Facebook in any fashion, let alone give Ceglia a 50 percent interest in it,” the press release says. In addition, the spacing, columns and margins of the substituted first page are different from those on the second signature page, the press release says. There are no differences in the actual contract found on the hard drive, the release adds.

Ceglia was represented by a series of lawyers and law firms in his lawsuit. According to DealBook, “Questions are now also being raised about the lawyers who represented Mr. Ceglia and kept his case alive for two years.” One law firm that withdrew its representation, Kasowitz Benson Friedman & Torres, had warned Ceglia’s new lawyers it believed the contract was falsified, the story says.

U.S. Attorney Preet Bharara commented on the charges against Ceglia in the press release. “Ceglia’s alleged conduct not only constitutes a massive fraud attempt, but also an attempted corruption of our legal system through the manufacture of false evidence,” he said. “Dressing up a fraud as a lawsuit does not immunize you from prosecution.”

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