Potentially New Evidence In Paul Ceglia’s Lawsuit Could Be Bad News For Facebook

Posted Apr 12, 2011

Last month a judge sided with Mark Zuckerberg to keep Paul Ceglia’s lawsuit in federal court rather than bringing it to a state court trial in New York. Ceglia claims to have 84% ownership in Facebook and supposedly has documents that prove it. Although Facebook claims the documents are fake, Ceglia is now being represented by prestigious law firm DLA Piper. DLA would not represent Ceglia unless they thought he had a case. Below is a break down of the whole situation:

– Paul Ceglia waited about 7 years to file the lawsuit against Facebook and Mark Zuckerberg
– Paul Ceglia was charged with criminal fraud over a wood-pellet company he founded.
– Ceglia said he found the Zuckerberg documents when rummaging through legal documents that related to his wood pellet business. So supposedly he forgot about the contract up until now.
– Ceglia has produced a contract that he and Zuckerberg signed that covers two projects: one called “StreetFax” and another called “the face book.”
– Ceglia also produced a cancelled check of $1,000.
– The contract states that Ceglia owns a 50% ownership in “the face book” along with an additional 1% ownership of the project per day that it was uncompleted past a specified date.
– Facebook said that the “StreetFax” part was real, but “the face book” component of the contract was fake.
– Ceglia produced over a dozen e-mails between him and Zuckerberg between July 2003 and July 2004.
– The e-mails contain information about how Ceglia will fund the projects and how he has funded the projects.
– The e-mails also contain information about how Zuckerberg met some upperclassmen (assuming to be the Winklevoss twins) that have a similar project idea in mind. In the e-mail, Zuckerberg said he is “stalling” them.
– In the e-mails, Ceglia and Zuckerberg discussed how to monetize the face book such as charging alumni or selling Harvard paraphernalia (coffee mugs, t-shirts, etc).
– Another e-mail shows communication between Zuckerberg and Ceglia after Face Book was launched. Ceglia said the website looks great and made the monetization suggestions.
– Zuckerberg and Ceglia e-mailed each other back and forth about how adding 1% of ownership for each day late was unfair. Ceglia agreed to the 50-50 split.
– In April 2004, Zuckerberg wrote Ceglia an e-mail saying that he is considering shutting down The Face Book due to lack of interest in the community. Ceglia responds by saying that Zuckerberg is involved in criminal stunts. The criminal stunts Ceglia accused Zuckerberg of doing was hacking StreetFax because Ceglia refused to send him any additional money.
– In July 2004, Zuckerberg wrote an e-mail to Ceglia saying happy birthday and to say he will mail back $2,000 to him that he was paid for building The Face Book and StreetFax. Supposedly Ceglia never received the $2,000 and he never relinquished the 50% interest in the General Partnership.

BusinessInsider.com has the scanned documentation. If the evidence that Ceglia has in fact is real, then Facebook may have to spend millions of dollars to settle.