Facebook: Evidence Shows New York Man's Lawsuit Is Fraud

  on March 26 2012 8:48 PM
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(Reuters) - Facebook Inc urged a federal judge on Monday to throw out a lawsuit by a New York wood pellet salesman who said he deserves half of founder Mark Zuckerberg's stake in the social media company, calling the case a fraud.

Paul Ceglia, who has lived in Wellsville, New York, sued Zuckerberg and Facebook - now one of the world's most valuable companies - in 2010 in a dispute over a 2003 contract.

Facebook has repeatedly said Ceglia was a fraud and that a Work for Hire Document was a forgery and emails he purportedly exchanged with Zuckerberg were made up. Last year, the presiding judge in U.S. District Court in Buffalo, New York, gave Facebook more time to gather evidence.

The evidence is in. And it is devastating for Ceglia and his cohorts, Facebook's lawyers wrote in a motion to dismiss filed on Monday.

Ceglia and his co-conspirators have compounded their wrongdoing by destroying and tampering with evidence, obstructing discovery, and defying court orders.

They said they had found emails, dating back to Zuckerberg's days at Harvard University, to prove Ceglia's fraud.

They asked the judge to halt Ceglia's lawsuit, which they said was filed in hopes of extorting a settlement through their fraudulent scheme.

A lawyer for Ceglia could not immediately be reached to comment.

Ceglia said he hired Zuckerberg when he was a Harvard University freshman for multiple projects, one of which eventually became Facebook.

Founded by Zuckerberg in a Harvard dorm room and now based in Menlo Park, California, Facebook is the world's No. 1 online social network with more than 845 million users.

In February, Facebook filed with securities regulators to raise $5 billion in an initial public offering. Zuckerberg controls 28.4 percent of Facebook's Class B shares, a filing shows.

Facebook may be worth $93.6 billion, according to SharesPost Inc, which tracks valuations of private companies.

The case is Ceglia v. Zuckerberg et al, U.S. District Court, Western District of New York, No. 10-00569.

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