Facebook Says Ceglia Computers Show ‘Smoking Gun’ of Fraud

Enlarge image

Facebook Says Ceglia Computers Show ‘Smoking Gun’ of Fraud

Andrew Harrer/Bloomberg

Facebook Inc. said its inspection of computers turned over by Paul Ceglia, the western New York man who claims he’s entitled to half of Chief Executive Officer Mark Zuckerberg’s holdings in the social-networking company, shows “smoking gun” evidence of fraud.

Facebook Inc. said its inspection of computers turned over by Paul Ceglia, the western New York man who claims he’s entitled to half of Chief Executive Officer Mark Zuckerberg’s holdings in the social-networking company, shows “smoking gun” evidence of fraud. Photographer: Andrew Harrer/Bloomberg

Enlarge image

Paul Ceglia

Bob Van Voris/Bloomberg

Paul Ceglia poses for a photo outside his home in Wellsville, New York.

Paul Ceglia poses for a photo outside his home in Wellsville, New York. Photographer: Bob Van Voris/Bloomberg

Facebook Inc. said its inspection of
computers turned over by Paul Ceglia, the western New York man
who claims he’s entitled to half of Chief Executive Officer Mark Zuckerberg’s holdings in the social-networking company, shows
“smoking gun” evidence of fraud.

Ceglia sued Facebook and Zuckerberg last year, claiming
that a two-page contract Zuckerberg signed in 2003 gave Ceglia
half of the company when the service was started the following
year. Palo Alto, California-based Facebook has grown to become
the world’s biggest social-networking site.

U.S. Magistrate Judge Leslie Foschio in Buffalo, New York,
last month ordered Ceglia to let Facebook run forensic tests on
his computers, hard drives and electronic storage media, as well
as on the contract and the e-mail he says support his claim.

“Defendants have uncovered smoking-gun evidence that the
purported contract at the heart of this case is a fabrication,”
Facebook said in its court filing late yesterday.

In a publicly filed version of the motion papers, Facebook,
citing a confidentiality order in the case, didn’t identify the
evidence it says was “embedded in the electronic data on
Ceglia’s computer.”

Paul Argentieri, a lawyer for Ceglia, declined to comment
on Facebook’s claim, citing Foschio’s July 13 confidentiality
order.

$69.2 Billion

Facebook is valued at as much as $69.2 billion, according
to Sharespost.com, an online marketplace for investments in
companies that aren’t publicly traded.

Facebook’s “smoking gun” claim comes in the context of a
court battle between the parties over the pretrial exchange of
evidence in the case.

On July 1, Foschio entered several orders requiring Ceglia
to turn over evidence for testing by Facebook after the company
argued Ceglia’s case was a “fraud on the court.” Foschio also
ordered Facebook to produce samples of Zuckerberg’s signature
and 176 e-mails from Zuckerberg’s Harvard University e-mail
account.

Both sides filed papers claiming the other side has failed
to comply fully. Facebook also said Ceglia abused Foschio’s
protective order by designating all 120 relevant items found on
Ceglia’s computers, CDs and floppy disks as confidential.
Facebook said it wants the “smoking gun” and other materials
made public.

Foschio set a hearing on the matter for Aug. 17.

StreetFax

Zuckerberg worked for Ceglia in 2003, writing computer code
for StreetFax.com, a failed company that Ceglia was setting up
to sell photographs of streets and intersections to insurance
companies and other clients. Zuckerberg claims he signed a
contract with Ceglia for the StreetFax work. The contract had
nothing to do with Facebook, according to Zuckerberg.

At a hearing in Buffalo June 30, Facebook lawyer Orin Snyder told Foschio that Zuckerberg no longer has his copy of
the contract he signed with Ceglia.

In the papers filed yesterday, Facebook said that Ceglia,
has moved from his home in Wellsville, New York, to Ireland.
Ceglia, 38, said in an interview last year that he and his
family lived in Ireland for six years when he was a child.

Argentieri declined to comment on Ceglia’s location.

The case is Ceglia v. Zuckerberg, 1:10-cv-00569, U.S.
District Court, Western District of New York (Buffalo).

To contact the reporter on this story:
Bob Van Voris in U.S. District Court in Manhattan at
rvanvoris@bloomberg.net.

To contact the editor responsible for this story:
Michael Hytha at mhytha@bloomberg.net.

Share and Enjoy

Facebook spam: Man accused of sending 27 million fake messages

The accused “Spam King” was in the can –- at least briefly.

Sanford Wallace was indicted by a federal grand jury in San Jose on Thursday and turned himself into the FBI. His alleged crime? Sending 27 million bogus messages via Facebook, compromising about 500,000 user accounts in three separate waves, according to the San Jose Mercury News.

This is how the paper described it:

Each time, the 43-year-old Las Vegas resident hacked into then-Palo Alto-based Facebook’s computer network and sent spam programs to users of the popular social networking site, the indictment said.

He got past the site’s spam filters and infiltrated real accounts, logging on as strangers and posting the spam messages to their friends’ walls. That way, people would log onto Facebook and think their friends sent them a link to a website.

Although such messages often look fishy, some users would invariably click on the link — such as “gayestprofile.com” — and enter their name and password on the ensuing site. Wallace would log in as a new user and send out more spam, and he would get paid each time he drove traffic to the spam site.

Facebook officials said they spent a lot of time and money fixing the system to prevent future attacks.
The FBI investigated for two years, according to the Mercury News. Wallace was indicted on July 6 and was released on $100,000 bond after a hearing Thursday.

ALSO:

Suspect charged in “All Ears Bandit” bank robbery case

3 medical marijuana dispensaries close in Newport Beach

Motorist arrested in hit-and-run that killed pregnant woman

– Maria L. LaGanga in San Francisco

Photo: A screen shot of a Facebook page. Credit: Thierry Roge / Reuters

Share and Enjoy