The New Yorker man previously filed a multi-billion dollar case against Facebook Inc and Mark Zuckerberg. Paul Ceglia was a pellet salesman from Wellsville, New York who was charged by the United States Postal Inspection Service and federal prosecutors with mail and wire fraud following an investigation of a fabricated evidence discovered. Ceglia initially claimed that he entered into a deal with Zuckerberg way back 2003.
The accusations against Zuckerberg by Ceglia became an instant hit prior to Facebook becoming public during May of this year. The origins of the largest networking site in the world had been the focus of other accusations including another legal battle filed by Zuckerberg’s classmates in Harvard University documented in the Hollywood movie “The Social Network”.
Ceglia filed a case against Zuckerberg and its social network company in 2010 following his claim that he entered into an agreement with Zuckerberg in 2003 giving him a stake in Facebook. Zuckerberg had worked at Ceglia’s company, StreetFax.com, while attending Harvard University.
Last March of this year, lawyers of Facebook revealed that the claims of Ceglia were false by showing emails sent by Zuckerberg to him. The emails noted that forensic experts found that Ceglia fabricated fake emails by typing text into a Microsoft Word document first before claiming that they were emails sent to him by Zuckerberg.
Ceglia was asking for monetary damages as per the case.
“Dressing up a fraud as a lawsuit does not immunize you from prosecution,” U.S. Attorney Preet Bharara said in a statement.
Ceglia’s party did not comment on the issue as of yet.
Facebook lawyer of Gibson Dunn, Orin Snyder said: “Ceglia used the federal court system to perpetuate his fraud and will now be held accountable for his criminal scheme.”
The lawsuit of Ceglia filed in Buffalo, New York claimed that Zuckerberg shared his plans about Facebook while he was working for his company. Ceglia demanded part ownership of Facebook in exchange for a $1,000 investment he granted to Zuckerberg at the time.
Although not officially documented, he said that he had a deal with Zuckerberg as evidenced by email exchanges between them proving his claim.
Zuckerberg denied that allegations by saying that his idea for Facebook was not even invented until December of 2003. He submitted his own emails to prove his own defense.
Ceglia tapped several law firms including DLA Piper and Milberg, which eventually withdrew from the case after working for some time with him.
Ceglia was arrested on Friday morning. He appeared in a Buffalo federal court in the afternoon and a judge ordered a $21,000 bail until Monday noon so he will be given a change to appeal it.
Each of the charges filed against him will carry a maximum imprisonment of 20 years.
Postal Inspection Service investigators in-charged of probe arrested him after he returned from a trip abroad, according to a source familiar with the matter.
Last Friday’s hearing ordered Ceglia and his family to surrender their travel documents.
On the same day, a separate case in Massachusetts was made against Citigroup Inc for releasing financial information of Facebook before the networking giant went public. Citigroup was fined $2 million for the said case.