Half-Ownership Claim of Facebook Is a ‘Fabrication,’ Magistrate Says

• By David Kravets
• 03.26.13

http://www.wired.com/threatlevel/2013/03/ceglia-fabricated-evidence/

Paul Ceglia

Declaring the case fraudulent, a magistrate judge on Tuesday urged a federal court to dismiss claims by a New York man whose lawsuit asserts he owns half of the social-networking service Facebook.
The plaintiff in the suit was arrested last year and has been charged with a multi-billion-dollar scheme to defraud the social-networking site and its chief executive and founder Mark Zuckerberg.
Paul Ceglia, of Wellsville, New York, remains free on bond. He filed his federal civil lawsuit in 2010, citing documents and a contract between him and Zuckerberg that promised him 50 percent of the social networking site.
His lawsuit prompted the federal fraud charges, and a federal magistrate decided Tuesday that enough was enough, and found that the contract at the center of the dispute “is a recently created fabrication.” (.pdf)
Those were the words of Magistrate Leslie G. Foschio of New York. Complex cases are often referred to magistrates, who make recommendations to a lawsuit’s presiding judge, in this case U.S. District Judge Richard Arcara.
There is no timeline for Arcara to rule, but Ceglia has two weeks to respond to Foschio’s recommendation.
Facebook used harsh words to describe Foschio’s decision.
“Today’s federal court decision confirms what we have said from day one: This lawsuit is an inexcusable fraud based on forged documents,” said Colin Stretch, Facebook’s deputy general counsel.
Ceglia, a wood pellet salesman, is accused in New York federal criminal court of one count of mail fraud and one count of wire fraud (.pdf). Each count carries a maximum 20-year term.
Indeed, Facebook has made clear from the beginning that it believed the contract and e-mails that Ceglia produced as evidence were fake — and the company even hired private investigators to dig up dirt on Ceglia’s checkered past.
Zuckerberg maintained that an authentic “Work for Hire” contract between the two did exist, but it involved another project altogether. Ceglia hired Zuckerberg to work on Ceglia’s StreetFax company nearly a decade ago, Zuckerberg claimed. Ceglia, however, alleged the contract also discussed fronting Zuckerberg $2,000 in exchange for half of Facebook when Zuckerberg was a Harvard University computer science student.
Ceglia did not immediately respond for comment.