Facebook adds arrest to reasons to dismiss NY suit

Lawyers for Facebook have added a New York man's arrest on fraud charges to their list of reasons his lawsuit claiming part ownership of the social networking giant should be dismissed. A federal prosecutor's decision to charge Paul Ceglia with two felonies last month "is a powerful, objective indicator that Ceglia is perpetrating an unprecedented fraud on the federal courts and defendants," the lawyers wrote in a U.S. District Court filing in Buffalo. The case, they said, "has now descended into farce." Ceglia, of Wellsville in New York's Southern Tier, has pleaded not guilty to charges of scheming to defraud Facebook by filing his 2010 civil suit. The U.S. Attorney's Office in Manhattan said an investigation by the U.S. Postal Inspection Service determined Ceglia had doctored, fabricated and destroyed evidence to support his civil claim that a 2003 contract between him and Facebook founder Mark Zuckerberg entitles Ceglia to a 50 percent interest in the Menlo Park, Calif., company. Within days of his arrest, the lead attorney in Ceglia's lawsuit, Dean Boland, asked the court for permission to withdraw from the case for undisclosed reasons. Boland, however, said the request had nothing to do with a belief Ceglia had engaged in fraud. More than a half dozen lawyers and law firms have similarly quit since the suit was filed. Facebook, represented by the New York City firm of Gibson, Dunn & Crutcher LLP and the Buffalo firm Harris Beach, said in a Nov. 9 filing that Boland's request to withdraw is even more reason for the judge to grant their motion to throw Ceglia's lawsuit out. For his part, Ceglia has suggested Zuckerberg, as a skilled hacker, could have planted damning evidence found by Facebook computer experts on a hard drive belonging to Ceglia's parents. His attorneys also argue the case should be heard by a jury because the teams of experts hired by Ceglia and Facebook to determine whether the contract is authentic reached differing conclusions. In his lawsuit, Ceglia claimed that a software development contract he and Zuckerberg signed included a provision entitling Ceglia to half ownership of Facebook in exchange for $1,000 in startup money for the budding company. Zuckerberg has acknowledged signing a contract with businessman Ceglia while attending Harvard University, but said it had nothing to do with Facebook.