Facebook: Emails show NY man's lawsuit a fraud

Tue Mar 27, 2012 1:54am IST

The Facebook logo is displayed on a computer screen in Brussels April 21, 2010. REUTERS/Thierry Roge/Files

The Facebook logo is displayed on a computer screen in Brussels April 21, 2010.

Credit: Reuters/Thierry Roge/Files

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REUTERS - Facebook Inc released emails by founder Mark Zuckerberg from his days at Harvard University to bolster its arguments that a wood-pellet salesman who sued for a 50 percent stake in the social media company lied and forged documents.

Facebook's lawyers asked a federal judge to dismiss a 2010 lawsuit by Paul Ceglia, of Wellsville, New York. The lawsuit, they said, was filed "in hopes of extorting a settlement" through a "fraudulent scheme."

Ceglia has claimed that he had a contract with Zuckerberg from 2003 for a project that would eventually become Facebook.

In a motion to dismiss Ceglia's amended lawsuit, Facebook lawyers included examples of Zuckerberg's emails from his college days that referred to Ceglia.

Facebook's lawyers also said that Ceglia had produced fraudulent documents, citing work by forensic experts who found that he had typed text into a Microsoft Word document and declared it was the text of emails with Zuckerberg in 2004.

Those emails did not appear in a search of the Harvard University server, Facebook's lawyers s aid in court papers filed in U.S. district court in Buffalo, New York.

Facebook's lawyers also cite d a January 25, 2004 email by Zuckerberg to Ceglia's partner that r efers to C eglia's StreetFax company and Zuckerberg's frustrations.

"I have to admit that implementing the last additional features and supporting the Streetfax website is not a top priority for me right now," Zuckerberg wrote.

According to the court document, the email goes on to say "there are many other things I'd like to do, and have started to, work on. I am at school surrounded by some of the smartest people in the world, cultivating ideas and constantly coming up with great projects to work on."

Ceglia claims in his lawsuit that he agreed to a $1,000 investment in a venture that would eventually become Facebook, now one of the world's most valuable companies. Th e two met when Ceglia hired Zuckerberg, now 27, to work on StreetFax when Zuckerberg was a freshman at Harvard.

FORENSIC TESTING

Facebook filed its court papers as it prepares for a widely anticipated initial public offering. The company may be worth $93.6 billion, according to SharesPost Inc, which tracks valuations of private companies. Zuckerberg controls 28.4 percent of Facebook's Class B shares.

The court filing said that testing of documents and email by forensics experts at digital risk management firm Stroz Friedberg sh owed that Ceglia's claim that he and Zuckerberg signed a "Work for Hire" document in April 2003 was impossible.

Zuckerberg, said Facebook's lawyers , did not conceive of the idea o f the social media company until December that year.

"There is no evidence whatsoever that Zuckerberg had so much as thought of Facebook as early as April 2003, let alone was sufficiently advanced in his thinking that he would sell ownership interests in the venture," lawyers for Zuckerberg and Facebook wrote.

"This fact alone conclusively establishes that the 'Work for Hire' document is a forgery," the filing said.

In an emailed statement, Ceglia's lawyers said Facebook was trying to end the lawsuit before a jury had seen all the evidence. They said th e evidence includes ex perts' declarations fav orable to their client abo ut the authenticity of his co ntract with Zuckerberg.

"Mr. Ceglia deserves his day in court, where the jury will resolve this dispute over the ownership of Facebook," the statement said.

Facebook cites emails showing that Zuckerberg was angry with Ceglia because he had received only $9,000 out o f $19,500 o wed for work on StreetFax. Facebook's lawyers say Ceglia in early 2004 sent emails in which he apologized for failing to pay Zuckerberg and pleaded for his patience.

"The numerous emails in which Ceglia begs for forgiveness and forbearance put the lie to the fictional narrative in his fabricated 'emails' in which he and Zuckerberg have an equal partnership and Ceglia angrily presses Zuckerberg for payment," the motion to dismiss said.

"If Ceglia in fact had leverage over Zuckerberg, as he has alleged, it is utterly implausible that Ceglia would have begged Zuckerberg for extra time to raise money to pay a small debt."

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

(Reporting By Grant McCool and Jonathan Stempel; Editing by Andre Grenon and Steve Orlofsky)

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