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Last updated on April 24, 2014 at 1:21 EDT

Man Who Claimed To Own Half Of Facebook Arrested On Fraud Charges

October 27, 2012

redOrbit Staff & Wire Reports – Your Universe Online

The man who sued Facebook and its CEO, claiming ownership of 50% of the world’s most popular social media website, has been arrested on federal fraud charges, various media outlets reported Friday.

According to Bloomberg‘s Bob Van Voris, Paul Ceglia was arrested by federal agents at his Wellsville, New York home and charged with fabricating evidence related to his ownership claims.

US prosecutors told Van Voris that Ceglia had created fake emails attributed to Zuckerberg, forged a 2003 contract that was at the heart of his assertions, and destroyed evidence. As a result, Ceglia has been accused of using the US Postal Service as part of his attempts to claim ownership of half of Facebook, and now faces mail and wire fraud charges, according to Computerworld reporter Sharon Gaudin.

“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 multi-billion-dollar fraud against Facebook and its CEO,” Manhattan-based attorney Preet Bharara told AFP on Friday. If convicted, the 39-year-old faces up to 20 years in prison for each charge, the news service noted.

Ceglia’s claims to the Zuckerberg-founded social network dates back to 2003, when then-Harvard University student Zuckerberg signed on to do programming work for Ceglia and his StreetFax website, BBC News explained. Ceglia would later claim in his lawsuit that he and Zuckerberg had signed a two-page contract which would have given him partial ownership of Facebook, though Zuckerberg countered that he had not yet come up with the idea for the website at that point in time.

“Ceglia maintained that he forgot about the matter until coming across the contract while defending himself against charges that he defrauded customers of his wood pellet business,” AFP said. “Prosecutors said that an investigation revealed that the contract and emails were bogus.”

The news agency added that attorneys had told them that Ceglia had “replaced the first page of a two-page contract with Zuckerberg for StreetFax software work, then ‘doctored, fabricated and destroyed evidence to support his false claim’ “¦ A search of one of Ceglia’s computer hard drives uncovered a copy of the real contract, which ‘does not refer to Facebook in any fashion, let along give Ceglia a 50-percent interest in it,’ prosecutors said.”

Ceglia appeared in a Buffalo, New York courtroom on Friday, where he pleaded not guilty to the fraud charges, Van Voris said. He was released on $21,000 cash bail, but his release was delayed until October 29 pending a government appeal of that decision, Barbara Burns, a spokeswoman for William Hochul Jr., the US Attorney for western New York, told the Bloomberg reporter.

“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,” Bharara told reporters in a statement. “Dressing up a fraud as a lawsuit does not immunize you from prosecution.”


Source: redOrbit Staff & Wire Reports - Your Universe Online