Paul Ceglia Arrested for Fraud in Facebook Stake Claim
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UPDATED: Oct 29, 2012
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Two years ago, Paul Ceglia filed a lawsuit that surprised many, claiming partial ownership of social network giant, Facebook. Ceglia insisted he made an agreement with Facebook founder Mark Zuckerberg entitling him to a 50 percent share of the company. Zuckerberg denied this and counter-claimed that the New York man was a fraud and a scam artist.
Finding the lawsuit to be a sham, federal authorities have now arrested Ceglia on charges of billions of dollars in attempted fraud, reports Reuters. It was found that Ceglia went so far as to create fake documents and evidence to support his bogus claim, and used the federal court system to further his crime, making the fraud charges more serious.
Details of Ceglia’s False Claim
According to reports, in 2003, a few months before Facebook was created, Zuckerberg, a Harvard student at the time, answered an ad posted by Ceglia to help program a new Internet business. Ceglia hired Zuckerberg and paid him $1,000.
The two did not have contact again until 2010, when Ceglia filed his lawsuit claiming a significant share of Facebook. With the lawsuit, Ceglia submitted a contract and an email exchange between he and Zuckerberg attesting to these claims. After a federal investigation, both were found to be fabricated or doctored. The real contract had no mention of Facebook and the emails could not be found on Zuckerberg’s hard drive.
Criminal Fraud Lawsuits
Fraud charges can come in many different forms and there are three basic categories of fraud including consumer fraud, employee fraud and government fraud.
Under the umbrella of consumer fraud are two of the most common types of federal charges known as mail fraud and wire fraud. This includes instances of using false Internet or phone interactions to further a scam. This is the type of fraud that Ceglia is being accused of in the federal lawsuit.
Fraud penalties can be very serious. Ceglia could be facing one charge of mail fraud and one charge of wire fraud, which could each carry a sentence of up to 20 years in prison.
In order to prove fraud in federal court, it must be shown that the defendant knowingly misrepresented facts and that the victim of the fraud suffered an actual loss or injury, among other elements. In the lawsuit brought against Ceglia, prosecutors have said they intend to not only hold him accountable for his actions and for causing Zuckerberg distress, but also those who assisted Ceglia in his legal endeavors, including his lawyers.