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Paul Ceglia Arrested Over Facebook Ownership Scheme

By Deanne Katz, Esq. | Last updated on

Paul Ceglia famously sued Facebook over what he claimed was a 50% ownership stake in the company. But the tables have now turned, after Ceglia was arrested Friday on suspicion of fraud.

Back in 2010, Ceglia made headlines when he filed a suit against Facebook and CEO Mark Zuckerberg, claiming that he owned half of the social media company. As evidence, Ceglia pointed to a contract from 2003 between himself and Zuckerberg which claimed to show Ceglia invested $1,000 in the original stages of Facebook.

Ceglia's case began to unravel when several law firms dropped his case. Then he was fined for delaying the trial. But now he's likely to get a much harsher punishment.

Allegations of fraud against Ceglia have followed him since the lawsuit began.

Zuckerberg and Facebook claimed from the beginning that Ceglia's self-proclaimed "contract" was a cut-and-paste fake, reports CNET. Then in August, a court ordered Ceglia to produce a letter from his former lawyers that allegedly said they suspected Ceglia of fraud.

That would explain why he's had such a hard time holding onto his representation.

Federal officials charged Ceglia with mail and wire fraud for his actions in the lawsuit against Facebook. They claim he doctored the contact between himself and Zuckerberg, and created fake emails to use as evidence at trial.

Investigators claim they found the original contract in a search of Ceglia's hard drive. That contract allegedly makes no reference to Facebook.

The tie to federal fraud is that Ceglia sent the fraudulent documents through the U.S. Postal Service and via email, according to CNET.

If the allegations against him are proven, it could also be a difficult situation for Ceglia's attorneys. The court likely won't look too favorably on lawyers who knowingly pursued the allegedly fraudulent claim. Since at least one attorney figured it out, it could be difficult to prove that other attorneys didn't know as well.

In the meantime, Paul Ceglia will have to find someone to defend him in federal court. Given his history, it may not be that easy. He faces up to 40 years in prison if convicted.

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