Facebook blasts Ceglia lawsuit as 'outrageous fraud'

@CNNMoneyTech May 27, 2011: 9:11 AM ET

NEW YORK (CNNMoney) -- Paul Ceglia's claim that an eight-year-old contract signed by Facebook founder Mark Zuckerberg entitles him to 50% ownership of the company "is a brazen and outrageous fraud," Facebook said Thursday in a court filing responding to Ceglia's lawsuit.

Calling him "an inveterate scam artist whose misconduct extends across decades and borders," Facebook blasted Ceglia's lawsuit as "his latest and most far-reaching fraud," one based on "a doctored contract and fabricated evidence."

Zuckerberg did have actual business dealings with Ceglia, a Wellsville, N.Y., resident who ran a series of local businesses.

In early 2003, Zuckerberg -- then a Harvard student who frequently accepted work-for-hire programming jobs he found through Craigslist -- signed a written agreement to do work for Ceglia on a now-defunct website called StreetFax.com. That contact became fodder for a "'cut-and-paste' job fraudulently manufactured" by Ceglia for his lawsuit, Facebook said in its filing.

Ceglia filed the first version of his lawsuit almost a year ago in a New York state court. The evidence he submitted to the court included a copy of a contract allegedly signed by Zuckerberg for development work on StreetFax, and on a project "designed to offer the students of Harvard university access to a wesite [sic] similar to a live functioning yearbook with the working title of 'The Face Book.'"

Ceglia's case was later transferred to federal court in Buffalo, N.Y., where Facebook filed its response on Thursday.

Zuckerberg did not start working on Facebook until December 2003 -- more than seven months after the alleged contract with Ceglia was signed, the company said. The first version of Facebook, called "thefacebook.com," launched in February 2004.

"At no time did Zuckerberg enter into any agreement, written or otherwise, with Plaintiff or anyone affiliated with Plaintiff concerning Facebook or any similar social networking service or web site," the company said.

In a revised version of his complaint filed last month, Ceglia added quotes from a series of incendiary e-mails he claims he exchanged with Zuckerberg over their business dealings. In Thursday's filing, Zuckerberg denies the authenticity of those e-mails. Facebook also denies them, but with a caveat: Throughout the filing, the company repeatedly states that it "lacks knowledge or information sufficient to form a belief as to the truth of the allegations."

Asked about Facebook's response, Ceglia's legal team said it is "consistent with their press statements but is devoid of any facts."

They added: "We are prepared to move the case forward into discovery and our client looks forward to his day in court."

Valued at $50 billion in its last major financing round, Facebook has been a lightening rod for lawsuits from those seeking their own piece of the ever-more-valuable company.

The company's long-running battle with Cameron and Tyler Winklevoss -- a key plot point in "The Social Network," last year's fictionalized dramatization of Facebook's origins -- wound down in April when an appeals court judge told the twins it was time to bury the hatchet.

They didn't. Their lawyer recently said the brothers will appeal their case to the U.S. Supreme Court. To top of page

  • -->

    Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.