Bloomberg News

Facebook Claimant Ceglia Indicted for Wire, Mail Fraud

November 27, 2012

Paul Ceglia was indicted on charges he faked evidence to support his claims that he signed a contract with Facebook Inc. (FB:US) Chief Executive Officer Mark Zuckerberg giving him a multibillion-dollar share in the world’s biggest social network,

Ceglia was arrested and charged last month in a criminal complaint with one count each of wire fraud and mail fraud, and was accused of the same crimes by a New York federal grand jury, according to an indictment released yesterday by U.S. Attorney Preet Bharara in Manhattan.

Ceglia, 39, doctored a legitimate 2003 contract with Zuckerberg, in which the future CEO agreed to perform coding work for Ceglia’s website, into a phony contract “in which Zuckerberg agreed to provide Ceglia with at least a 50 percent interest in Facebook,” according to the indictment.

Prosecutors say Ceglia also fabricated e-mails and destroyed evidence in the case.

The indictment is necessary to bring the western New York man’s case to trial. Each of the charges carries a maximum sentence of 20 years in prison. Ceglia pleaded not guilty last month. He is set to appear in Manhattan federal court on Nov. 28.

Ceglia sued Zuckerberg and Facebook in 2010, claiming 84 percent of the company. He later reduced his demand to half of Zuckerberg’s Facebook holdings. Facebook, based in Menlo Park, California, said from the start that Ceglia’s claim was fraudulent.

Ceglia’s lawyer, Dean Boland of Lakewood, Ohio, didn’t immediately respond yesterday to a voice-mail message seeking comment on the criminal charges.

The contract case is Ceglia v. Zuckerberg, 10-cv-00569, U.S. District Court, Western District of New York (Buffalo). The criminal case is U.S. v. Ceglia, 12-mj-2842, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Bob Van Voris in New York at rvanvoris@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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