Home All Stories Fraud arrest upturns Facebook claim

Fraud arrest upturns Facebook claim


Menlo Park, Calif. – A former acquaintance of Facebook founder Mark Zuckerberg faces federal charges in New York for allegedly masterminding a multi-billion dollar scheme to defraud Zuckerberg out of a 50 percent stake in the Menlo Park-based social networking giant.

The U.S. Attorney in Manhattan has charged Paul Ceglia with falsely claiming to have been promised half the company, then doctoring and fabricating evidence to support the claim.

“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,” said Manhattan U.S. Attorney Preet Bharara.

The allegations date back to 2003, when Zuckerberg, then a student at Harvard, allegedly agreed to perform programming work for Ceglia’s online business, StreetFax.com. Years later, in 2011, Ceglia filed a federal suit in New York, claiming Zuckerberg had promised him at least a 50 percent interest in “The Face Book” project that ultimately became Facebook.

Ceglia, 39, was arrested Friday by federal agents at his home in Wellsville, N.Y.. He is charged with one count of mail fraud and one count of wire fraud, with each count carrying a maximum sentence of 20 years in prison.

Bharara stated: “As alleged, 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.”

This article was also published in Bay Area Tech Wire.

Related links:

DOJ – Press briefing

Photo by Flickr user Kevin Krejci, used under Creative Commons license