Federal agents arrested Paul Ceglia, a resident of upstate New York who claimed that he is rightfully owed 50% of Facebook, on October 26th. Ceglia first filed claims in July 2010 in New York citing that he had hired Facebook's founder, Mark Zuckerberg, to build a website similar to Facebook in return for half of the company. Ceglia was charged with perpetuating a "multi-billion-dollar scheme" to defraud the company, including one count of mail fraud and one count of wire fraud that each carry a maximum sentence of 20 years in prison (Pepitone).
Ceglia first filed his suit in 2010 and caught Facebook off-guard. Facebook's assets were immediately frozen by a state court while their attorneys hurried to discover the previous business transactions between Ceglia and Zuckerberg, which consisted of contract work on a now-defunct site called StreetFax. However, Ceglia doctored the contract to include a mention of a fledgling site called "the Face Book" (Pepitone). .
According to government investigators, Ceglia "simply replaced page one of the real contract with a new page one doctored to make it appear as though Zuckerberg had agreed to provide Ceglia with an interest in Facebook" (Pepitone). .
"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 Preet Bharara, the US attorney in Manhattan. "Dressing up a fraud as a lawsuit does not immunize you from prosecution" (Lattman). .
Zuckerberg has denied Ceglia's claims since the beginning, and the government supports his accusations that Ceglia "doctored, fabricated, and destroyed evidence to support his false claim," according to a statement released by the US attorney's office. According to the government's complaint, Ceglia altered his real contract with Zuckerberg and created emails that did not previously exist to support his false claims (Pepitone).