Facebook says its inspection of computers turned over by Paul Ceglia, a New York man who claims he's entitled to 50 percent ownership of the social-networking giant, has turned up a "smoking gun" that shows Ceglia's lawsuit is a fraud based on fabricated evidence.
Ceglia claimed in a lawsuit filed last year against Facebook and its CEO and co-founder, Mark Zuckerberg, that Zuckerberg entered into a contract with Ceglia in 2003 to design and develop the Web site that would ultimately become Facebook--a company now with an estimated value of more than $70 billion.
Zuckerberg and Facebook, who had previously called the alleged contract a "cut-and-paste job," filed a discovery motion in June for the original contract, e-mails in native form, and inspection of all computers in Ceglia's possession, as well as those in his parents' house.
The inspection of those computers turned up "embedded" evidence that the alleged contract central to Ceglia's lawsuit was fabricated, the defendants said (see filing below).
The filing was one of two nearly identical memorandums of law that Facebook and Zuckerberg filed yesterday in the U.S. District Court for the Western District of New York. However, the one made publicly available was heavily redacted and does not describe the defendants' alleged evidence of fraud "because of Ceglia's egregious abuse of the confidentiality provisions in the joint stipulated protective order," Facebook said in its filing:
Ceglia has designated all 120 relevant documents and files that were found on his computers, CDs and floppy disks as containing "confidential" information that must be shielded from the public. He does not want the public to know what was discovered on his computers because it includes smoking-gun documents that conclusively establish that he fabricated the purported contract and that this entire lawsuit is a fraud and a lie.
Paul Argentieri, Ceglia's longtime New York-based attorney, as well as the San Diego-based Lake law firm, which now also represents Ceglia, did not immediately respond to a request for comment.
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Ceglia has said he hired Zuckerberg through a Craigslist ad to write code for a project called StreetFax and paid Zuckerberg $1,000 for coding work; he also allegedly invested $1,000 in Zuckerberg's The Face Book project, which gave him a 50 percent interest in the company as well as an additional 1 percent interest for every day after January 1, 2004, that The Face Book was delayed.
In a revised complaint filed in April, Ceglia cited more than a dozen e-mails purportedly between himself and Zuckerberg that detail discussions on design, development, business plans, and eventual contract disputes regarding what was then known as The Face Book.
Last year, Ceglia produced a canceled check that he said proved he paid Zuckerberg $3,000 for some freelance software development work for a project called "The Face Book." Facebook initially said it believed the contract was a "likely" forgery. It has since become more forceful and said it considers it to be an outright fake.