Feds arrest New York entrepreneur who sued Facebook for half ownership

Paul Ceglia, a New York City-based entrepreneur, was arrested on Friday and charged with one count of mail fraud and one of wire fraud in connection to a lawsuit he filed against Facebook in 2010. Two years ago, Ceglia said that he had signed a contract with Facebook's Mark Zuckerberg, and that the CEO owed him an 82 percent share of the company. Ceglia then refiled the lawsuit last year, claiming that he only deserved a more modest 50 percent share.

Authorities arrested Ceglia at his Wellsville, NY home this morning. An inspector from the US Postal Inspection Service filed a complaint yesterday that led to his arrest, alleging that the "online businessman" as the complaint refers to Ceglia, "engaged in a multi-billion dollar scheme to defraud Facebook and Mark Zuckerberg."

The complaint goes on to claim that in 2003, Zuckerberg signed a contract with Ceglia to complete some programming work, but that "that contract had nothing to do with Facebook, and made no reference to Facebook." The Inspector alleges that Ceglia replaced page one of the 2003 contract with a page of his own creation, to reflect a stake in Facebook. The Postal Inspector notes in his claim that the two-page document only references Facebook on the first page and that the columns, margins, and spacing on the first page differs significantly from the layout on the second page. Also, the first page of the document refers to StreetFax LLC, the company Ceglia hired Zuckerberg to work on, but Ceglia only claimed StreetFax as a limited liability corporation four months after the second page was signed by Zuckerberg.

A computer forensic expert also examined some of the e-mail correspondence that Ceglia used to file this complaint against Facebook, and found "several inconsistencies within the file system and embedded document metadata which were indicative of intentional, organized, and methodical alteration, tampering and backdating."

If he's convicted, Ceglia's two counts of mail fraud and wire fraud each carry maximum sentences of up to 20 years.