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[Fail] Paul Ceglia Arrested for Trying to Defraud Facebook for Billions
Impudence is a word that I’d normally save for the likes of Apple, but today it applies to someone who’s just as audacious as the beloved Cupertino Zombie Factory. Paul Ceglia, an Internet entrepeneur, sued Facebook and Mark Zuckerberg in 2010 about a contract both he and Zuck supposedly signed regarding the ownership of Facebook. According to Crunchbase:
On June 30, 2010, Ceglia filed a lawsuit against Facebook Founder Mark Zuckerberg, claiming 84% ownership of Facebook and seeking monetary damages. According to Ceglia, he and Zuckerberg signed a contract on April 28, 2003 that an initial fee of $1,000 entitled Ceglia to 50 percent of the website’s revenue, as well as an additional 1 percent interest in the business per day after January 1, 2004, until website completion. Zuckerberg was developing other projects at the time, among which was Facemash, the predecessor of Facebook, but did not register the domain name thefacebook.com until January 1, 2004. Facebook management dismissed the lawsuit as “completely frivolous”. Facebook spokesman Barry Schnitt told a reporter that Ceglia’s counsel had unsuccessfully sought an out-of-court settlement.
The contract itself says that Ceglia agreed to pay Zuckerberg $1,000 for StreetFax and $1,000 for another project called PageBook. The contract also mentions an expanded project called The Face Book to be completed by January 2004, saying an additional 1% interest in the business will be due the buyer for each day the website is delayed from that date. Ceglia has proferred a $1,000 receipt from his checkbook, dated six months after the contract as evidence that he paid Zuckerberg for his work. But it wasn’t the full $2,000 amount, and the agreement doesn’t describe what happens if there is a default.
Well, this all seemed a little fishy. The U.S. Postal Inspection Service of all people used one of their own to investigate these claims further by searching though hard drives, emails, and talking to witnesses. Several slam dunks of evidence were found to repudiate these claims. (1) A new cover page was forged on the contract that Ceglia used to sue with, which showed a (false) interest in Facebook for Ceglia. Each page of of this two page document were different from each other including the margins, spacing, and columns. (2) An original copy of the contract was found. It was was sent to an attorney in March 2004 and had no mention of the words The Face Book anywhere on the first page as the falsely created one did. (3) Emails between Zuckerberg and Ceglia were faked. Actual emails retrieved from Harvard email backup tapes showed that ones Ceglia used as evidence in his case against Facebook were non-existent. (4) Files overwritten with newer data than Ceglia claimed were found. Purposeful back-dating was evident, documents had edit dates from 2011 that were supposedly from 2003. (5) Zuckerberg as well as another Facebook founder have corroborated that the idea of Facebook didn’t occur until months after the contract with Ceglia was signed.
So what do phoney baloney claims over a mere $20-30 Billion get you (based on $50 Facebook Billion valuation)? If you’re Paul Ceglia, you get a loud “knock” on the door with a battering ram, a flash-bang in your living room, lots of shouting, and an in-house party with the FBI (the whole SWAT-style entrance may have been an exaggeration). Anyway, Paul Ceglia has been charged with mail and wire fraud, each of which faces up to 20 years in prison. The FBI arrested him at his home in NY on Friday after an official complaint from the U.S. Postal Inspection Service was filed. Ceglia, who is a no stranger to the law will have his day in court to plead his case, but it doesn’t look very good for him if this evidence has any merit.
Paul, nice attempt, but your illusions of grandeur may have been a little too grand. Claiming to own 50% of one of the World’s largest tech companies is a hugely bold claim, especially when it’s based off a poorly forged contract, falsified emails, document changes, and flat-out ridiculousness. Check out the U.S. Postal Inspection Service’s complaint for yourself:
Sources: Huffington Post and Ars Technica
2012-10-27 11:47:18
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