Facebook Disputes Another Ownership Claim As IPO Approaches
March 27, 2012

Facebook Disputes Another Ownership Claim As IPO Approaches

John Neumann for Redorbit.com

With an impending IPO that could prove to be one of the largest in US history, claims of being an early investor in Facebook are flying fast, reports the AFP news agency.

Paul Ceglia appeared in court last June claiming that he signed a contract with Facebook co-founder Mark Zuckerberg in April 2003 to design a website called “The Face Book” or “The Page Book.” Ceglia claims in his suit that he had a contract that entitles him to 50 percent of Zuckerberg´s Facebook stake, which is worth billions of dollars.

Zuckerberg settled with Divya Narendra and brothers Cameron and Tyler Winklevoss in 2008 over claims that he copied their idea for a Harvard University networking site when they all were students.

Ceglia submitted a copy of a contract with Zuckerberg to the court hearing, but Facebook lawyers on Monday filed a motion to have the case dismissed on the grounds that Ceglia backed his claim with “forged documents and fabricated emails.”

“The evidence is in, and it is devastating for Ceglia and his cohorts,” Facebook said in court documents. “This entire lawsuit is a fraud and a lie.” Facebook lawyers also accused “Ceglia and his co-conspirators” of destroying or tampering with evidence and defying court orders.

Zuckerberg and Ceglia met through Craigslist in 2003 when Zuckerberg, then a Harvard University freshman, responded to an online posting to build a website for Ceglia called StreetFax.com, which was a mapping program for use by insurance adjusters.

In April 2003, the men signed a contract, the contents of which are now in dispute, reports Shayndi Raice for Wall Street Journal.

Lawyers for Facebook alleged that Ceglia had created a Work for Hire document by doctoring the text of the first page of the StreetFax Contract, and then adding it to the authentic second page of the contract, or facsimile, that had Zuckerberg´s signature.

During expedited discovery, Ceglia initially tried to conceal the hard drive containing the StreetFax contract, but later asserted that Zuckerberg and his lawyers had created a forged document themselves and somehow planted it on his hard drive, according to the court filing, writes John Ribeiro for Computerworld.

Facebook and Zuckerberg also stated that Gerald LaPorte, a forensic chemist and document dating specialist, tested the ink from the handwritten notations purportedly made when the Work for Hire document was signed in 2003. He determined that the ink is less than two years old.

“This is an untimely, opportunistic and fraudulent lawsuit,” began one of the documents Facebook filed Monday in support of dismissal. “The purported contract is a forgery, the so-called ℠emails´ that Ceglia quotes “¦ are fabrications and Ceglia is a convicted felon and well-known scam artist.”

A private investigator hired by Facebook reported Ceglia was convicted in Texas in 1997 for possession of hallucinogenic mushrooms, and discovered a 2005 no-contest plea to trespassing in Florida. Further investigation discovered a 2009 petition by the New York attorney general´s office accusing Ceglia and his wife of defrauding customers of their wood pellet business by accepting up-front payment for pellets they never delivered, reports Carolyn Thompson of the Associated Press.

Ceglia´s lead attorney, Dean Boland, of Lakewood, Ohio, said the lawsuit can´t be dismissed just because the findings of Facebook´s experts contradict those of Ceglia´s experts. He accused Facebook of trying to end the case before being required by the court to provide any evidence or have it heard by a jury.

If the social network´s public offering values the company at $100 billion as expected, the stake of 27 year-old Zuckerberg would be valued around $28 billion.