Facebook claimant Paul Ceglia charged with fraud

PUBLISHED : Sunday, 28 October, 2012, 12:00am
UPDATED : Sunday, 28 October, 2012, 6:13am

An American entrepreneur who sued Facebook and its chief executive officer, Mark Zuckerberg, was arrested and charged with fabricating evidence to support his multibillion-dollar claim that he owns part of the world's biggest social network.

Paul Ceglia faked e-mails from Zuckerberg, destroyed evidence and forged the 2003 contract on which he bases his claim, US prosecutors said.

Ceglia was arrested on Friday by federal agents at his home in Wellsville, New York.

Ceglia sued in 2010, claiming Zuckerberg signed a contract that gave him a share in Facebook while Zuckerberg was a student at Harvard University.

Facebook has claimed from the start that Ceglia's claim is fraudulent.

Ceglia is charged with one count each of mail fraud and wire fraud, each of which carries a maximum sentence of 20 years in prison. He pleaded not guilty in federal court in Buffalo, New York state.

Ceglia was freed on US$21,000 bail but his release was delayed until tomorrow to permit the government to appeal against the bail order.

The criminal complaint against Ceglia covers the entire time frame of the civil suit, from when he filed the claim in June 2010 until this month.

The mail fraud count targets an amended complaint Ceglia filed in April last year, which attaches e-mails between Ceglia and Zuckerberg. The government claims those e-mails are fraudulent.

On July 22, 2004, a week before Zuckerberg incorporated Facebook, Ceglia claimed, Zuckerberg sent an e-mail wishing him a happy birthday and offering to return his US$2,000 investment.

Ceglia's e-mails also show Zuckerberg discussing Cameron and Tyler Winklevoss, two Harvard students who would later sue Zuckerberg over Facebook's origins.

Prosecutors claim Ceglia altered a contract Zuckerberg signed in April 2003 relating to his work on, Ceglia's failed internet business that was intended to sell photos of traffic intersections to insurance companies.

The genuine contract concerns only the StreetFax work and doesn't mention Facebook, according to the government.