Facebook Asks Court to Throw Out ‘Fraudulent’ Paul Ceglia Lawsuit

  • Share
  • Read Later
Getty Images

Facebook founder Mark Zuckerberg, left. Wood-pellet salesman Paul Ceglia, right.

Social networking giant Facebook hopes to finally put an end to a bizarre lawsuit filed by an upstate New York former wood-pellet salesman who claims he owns half of the tech phenom. In a motion to dismiss the case Monday, Facebook produced a small labratory’s worth of forensic evidence to bolster its contention that Paul Ceglia’s lawsuit is no more than a “fraudulent shakedown.”

This lawsuit has been far-fetched from the start. Ceglia, a 38-year-old native of Wellsville, NY, originally filed it in 2010, during the buzz about “The Social Network,” the film about Zuckerberg’s fight with the Winklevoss twins over Facebook’s origins at Harvard — which perhaps added legitimacy to Ceglia’s claims. The company’s meteoric rise — and ballooning valuation — made it an obvious target. It will soon raise $5 billion in an initial public offering that could value the company at as much as $100 billion.

Facebook says Ceglia made a series of amatuerish mistakes as he fabricated and forged documents, including the contract he says he struck with Zuckerberg in 2003 that shows he’s entitled to a 50% ownership stake in Facebook. (While a student at Harvard, Zuckerberg had, in fact, done some contract programming work for Ceglia’s company StreetFax. The two met via Craigslist.)

Ceglia said that he had forgotten about the contract for 7 years, but found it while looking through his files after being charged in a $200,000 wood-pellet sales fraud. To support his lawsuit, Ceglia produced emails he said he exchanged with Zuckerberg allegedly describing the work to be done on “The Face Book.”

(More: With IPO, Facebook’s Valuation Could Reach $100 Billion)

Facebook calls Ceglia’s contract an outright fabrication, doctored to include references to Facebook where none existed. The company’s forensic examiners found evidence that Ceglia had tried to “bake” the document in the sun to make it look older, but they concluded that the ink on the document is less than two years old.

Facebook had previously said it found the authentic contract — with no mention of Facebook — on Ceglia’s servers.

As for the emails, Facebook says Ceglia manufactured them out of thin air, going so far as resetting the system clock on his computer to 2003 and 2004 to make them look authentic. Moreover, none of the emails could be be found on servers at Harvard, where Zuckerberg was a student at the time. Finally, Facebook pointed out a “historical impossibility” in one of Ceglia’s emails in which he congratulated Zuckerberg on Facebook’s launch — before the site even went live.

“Today’s motion proves what Facebook and Mark Zuckerberg have emphatically stated all along: this case is a fraud,” said Facebook attorney Orin Snyder. “The motion asks the Court to dismiss this fraudulent lawsuit, and demonstrates that Ceglia has forged documents, destroyed evidence, and abused the judicial system in furtherance of his criminal scheme. Ceglia must be held accountable.”

The lawsuit provides a vivid example of what happens when you sue a billionaire. “Facebook assembled a team of world-renowned forensic document examiners and e-forgery experts — experts often used by the United States government — to prove Ceglia’s fraud,” the company said in its motion summary. “It is not a coincidence that Facebook’s New York and local counsel are all former federal prosecutors. From the beginning, Facebook recognized that its attorneys were not defending a lawsuit, but prosecuting a fraud.”

It’s not a fair fight, but Ceglia, whom Facebook described as a “career criminal and hustler,” isn’t giving up, according to a statement from his attorney: “Mr. Ceglia deserves his day in court, where the jury will resolve this dispute over the ownership of Facebook.” He just better hope he’s not on the hook for Zuckerberg’s legal bills.

0 comments
Sort: Newest | Oldest