FEDS: Man Tried To Scam Zuckerberg, Facebook Out Of Billions ‘By Marching Into Federal Court For A Quick Payday Based On A Blatant Forgery’

A New York man tried to scam Mark Zuckerberg and Facebook out of billions of dollars by forging documents and filing a lawsuit to make it appear as though Zuckerberg had promised him a 50 percent share of the company, prosecutors said.

Paul Ceglia, 39, of Wellsville, was arrested this morning after an investigation by the U.S. Postal Inspection Service, prosecutors said.

“As alleged, by marching into federal court for a quick payday based on a blatant forgery, Paul Ceglia has bought himself another day in federal court for attempting a multibillion dollar fraud against Facebook and its CEO,” said U.S. Attorney Preet Bharara of the Southern District of New York. “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. That is always intolerable. Dressing up a fraud as a lawsuit does not immunize you from prosecution.”

When Zuckerberg was a Harvard student in 2003, prosecutors said, Ceglia contracted with him to do programming work for Ceglia and Ceglia’s StreetFax.com.

Ceglia later claimed in lawsuits that Zuckerberg “had promised him at least a 50% interest in ‘The Face Book’ project that ultimately became Facebook Inc.,” prosecutors said.

In reality, prosecutors said, Ceglia “doctored, fabricated, and destroyed evidence to support his false claim.”

From a statement by prosecutors (italics added):

“In support of his claim, [Ceglia] attached a copy of what he alleged to be the two-page April 28, 2003 contract between himself and Zuckerberg (“Alleged Contract”). The first page of the Alleged Contract contained language giving [Ceglia] “a half interest (50%) in the software, programming language and business interests” derived from the expansion of “The Face Book” or “The Page Book.” The second page of the Alleged Contract contained the signatures of [Ceglia] and Zuckerberg. Also in support of his claim, [Ceglia] described emails he alleged to have exchanged with Zuckerberg between July 2003 and July 2004 via Zuckerberg’s Harvard email account (“Purported Emails”). The Purported Emails reflected conversations between [Ceglia] and Zuckerberg about the design and functionality of “The Face Book” website, as well as ways to generate income from its expansion. The Purported Emails also reflected conversations in which Zuckerberg offered [Ceglia] money to “repair [their] business relationship.”

As alleged in the Complaint, however, [Ceglia’s] claim to having a contractual right to 50% of Facebook was entirely false. [Ceglia] simply replaced page one of the real contract with a new page one doctored to make it appear as though Zuckerberg had agreed to provide [Ceglia] with an interest in Facebook. And [Ceglia] doctored, fabricated and destroyed evidence to support his false claim. The evidence demonstrating [Ceglia’s] lawsuit is a fraud included the following:

  • A search of one of [Ceglia’s] hard drives uncovered a copy of the real April 28, 2003 contract, which [Ceglia] had emailed to an attorney in March 2004, years before his lawsuit against Facebook and Zuckerberg (“Real Contract”). Page one of the Real Contract does not refer to Facebook in any fashion, let alone give[Ceglia] a 50% interest in it.
  • The spacing, columns, and margins of page one of the Alleged Contract are different from the spacing, columns, and margins of page two of the Alleged Contract. No such differences exist as between the pages of the Real Contract.
  • A review of Harvard University’s email servers reveals that none of the Purported Emails appears in Zuckerberg’s email account as of February 2012. Further, none of the Purported Emails appears in Harvard’s backup tapes for Zuckerberg’s emails as they existed in October 2010, nor do any of the Purported Emails appear in Harvard’s backup tapes for Zuckerberg’s emails as they existed in November 2003. The emails between Zuckerberg and [Ceglia] that do exist in Zuckerberg’s email account do not show any discussion of Facebook and, contrary to [Ceglia’s] claim, show that Zuckerberg was asking [Ceglia] for money he was owed in 2004, not offering to give [Ceglia] money.
  • A forensic expert examined [Ceglia’s] hard drives and other electronic media and found evidence that in February 2011, [Ceglia] deleted files relating to the April 2003 contract with Zuckerberg and replaced them with new files that supported his lawsuit but that were backdated to make it appear as if those the files had in fact been created in 2003 and 2004. Further, a CD Rom revealed that [Ceglia] had done test runs on fabricating some of the documents, including the Purported Emails, upon which his lawsuit relied.
  • Zuckerberg and another of Facebook’s founders have said that the idea for Facebook did not arise until months after the April 2003 contract purportedly giving [Ceglia] an interest in Facebook.

Ceglia was charged with mail fraud and wire fraud, prosecutors said.

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