- WELLSVILLE, New York: Paul Ceglia, who claims in a lawsuit that he owns 84 percent of Facebook, says his case wouldn’t have been possible if state troopers hadn’t come to his house in October to arrest him for fraud.
Ceglia’s arrest and a suit by New York Attorney General Andrew Cuomo two months later, both the result of complaints related to his startup wood-pellet business, got him looking through old files to find assets to pay back customers, he said in an interview in his home in Wellsville. One of those files held a forgotten 2003 contract with Mark Zuckerberg, now chief executive officer of Facebook, he said.
Ceglia, 37, a self-described environmentalist from western New York who wants to legalize drugs and has views on the evils of central banks, claims the contract entitles him to most of the company. If true, the claim, which would give him control of the world’s most popular social networking service, would be worth about $21 billion, given estimates of the company’s value.
“If this thing hadn’t happened the way it happened, no way I would have ever started looking through these ancient folders,” Ceglia said of his pellet problems. “That contract would just be sitting in there gathering dust.”
In the weeks since Ceglia came to public attention with his lawsuit against Palo Alto, California-based Facebook and Zuckerberg, filed June 30 in New York state court, observers have been asking why he took so long to make his claim. His answer, it turns out, was he forgot about it.
Facebook said a photocopy of the contract, filed as an exhibit to the lawsuit, is a phony.
“Ceglia’s claims are absurd and his lawsuit is frivolous, if not outright fraudulent,” Facebook said in an e-mailed statement. “Ceglia has refused to produce the original contract and the copy we’ve seen is a forgery, with inconsistent margin sizes, inconsistent font sizes, and other glaring discrepancies,” the company said.
Ceglia, one of whose lawyers said the original is in a safe place, said he is eager to take on Zuckerberg, 26, and let a jury decide whether the contract is genuine.
“I’m coming after him,” Ceglia said. “A deal’s a deal.”
Ceglia’s claim is based on a two-page “Work for Hire” contract he claims Zuckerberg signed in April 2003, when the Facebook CEO was an 18-year-old freshman at Harvard. According to the copy of the contract, Ceglia agreed to pay Zuckerberg $1,000 to write computer code for StreetFax LLC, a company Ceglia said he was trying to get off the ground at the time. The alleged contract also refers to a $1,000 investment by Ceglia in a project named in one place as “The Face Book,” and as “The Page Book” in another.
In return, the alleged contract gives Ceglia a fifty- percent interest in “the software, programming language and business interests derived from the expansion of that service to a larger audience.” Another provision, Ceglia claims, gives him an additional one-percent interest for each day after Jan. 1, 2004, that the launch of “The Face Book” was delayed.
Ceglia said he has more evidence of his claim than just the contract.
“We e-mailed each other for more than a year,” he said.
Lisa Simpson, a lawyer for Facebook, said at a court hearing July 20 that Zuckerberg did sign some contract with Ceglia. Zuckerberg also worked for Ceglia on the StreetFax matter in 2003, she said.
What he didn’t do is sign over an interest in Facebook to Ceglia, she told US District Judge Richard Arcara at the hearing. Facebook argued in court papers that Zuckerberg couldn’t have given Ceglia a share of a project he didn’t conceive of until the following year.
Most book and journalistic accounts of Facebook’s short history say it was started in Zuckerberg’s Harvard dorm room in 2004 when he was a sophomore.
Ceglia said he found Zuckerberg by asking for bids for StreetFax coding work on Craigslist, the classified advertisement site. Zuckerberg was the low bidder, offering to do the work for $1,000, according to Ceglia. The two signed the contract at a hotel in Boston, he said. Ceglia claims that, in addition to the StreetFax work, Zuckerberg persuaded him to invest $1,000 in the “Face Book” idea.
Ceglia said he remembers the 18-year-old Zuckerberg as “probably one of the most difficult people that ever worked for me, in the sense that he simply could not finish his work. He just could not keep a deadline.”
Zuckerberg often made excuses for getting his work in late, including that he had to wash his father’s boat and that he’d left his laptop charger at home, Ceglia said.
“The work he did was really good,” Ceglia said. “He could code. I’d hire him today as a coder.”
Ceglia said he looks forward to a day when he might employ Zuckerberg again.
“If at some point in the future I start running Facebook, I guess I’m going to have to hire him to keep running the company,” Ceglia said. “I really don’t have much interest in it.”



