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Emails show N.Y. man's lawsuit a fraud: Facebook

Emails show N.Y. man's lawsuit a fraud: Facebook

NEW YORK (Reuters)—Facebook Inc. released emails by founder Mark Zuckerberg from his days at Harvard University to bolster its arguments that a wood-pellet salesman who sued for a 50% stake in the social media company lied and forged documents.

Facebook's lawyers asked a federal judge to dismiss a 2010 lawsuit by Paul Ceglia, of Wellsville, N.Y. The lawsuit, they said, was filed "in hopes of extorting a settlement" through a "fraudulent scheme."

Mr. Ceglia has claimed that he had a contract with Mr. Zuckerberg from 2003 for a project that would eventually become Facebook.

In a motion to dismiss Mr. Ceglia's amended lawsuit, Facebook lawyers included examples of Mr. Zuckerberg's emails from his college days that referred to Mr. Ceglia.

Facebook's lawyers also said that Mr. Ceglia had produced fraudulent documents, citing work by forensic experts who found that he had typed text into a Microsoft Word document and declared it was the text of emails with Mr. Zuckerberg in 2004.

Those emails did not appear in a search of the Harvard University server, Facebook's lawyers said in court papers filed in U.S. District Court in Buffalo, New York.

Facebook's lawyers also cited a Jan. 25, 2004, email by Mr. Zuckerberg to Mr. Ceglia's partner that refers to Mr. Ceglia's StreetFax company and Mr. Zuckerberg's frustrations.

"I have to admit that implementing the last additional features and supporting the Streetfax website is not a top priority for me right now," Mr. Zuckerberg wrote.

According to the court document, the email goes on to say "there are many other things I'd like to do, and have started to, work on. I am at school surrounded by some of the smartest people in the world, cultivating ideas and constantly coming up with great projects to work on."

Mr. Ceglia claims in his lawsuit that he agreed to a $1,000 investment in a venture that would eventually become Facebook, now one of the world's most valuable companies. The two met when Mr. Ceglia hired Mr. Zuckerberg, now 27, to work on StreetFax when Mr. Zuckerberg was a freshman at Harvard.

Facebook filed its court papers as it prepares for a widely anticipated initial public offering. The company may be worth $93.6 billion, according to SharesPost Inc., which tracks valuations of private companies. Mr. Zuckerberg controls 28.4% of Facebook's Class B shares.

The court filing said that testing of documents and email by forensics experts at digital risk management firm Stroz Friedberg L.L.C. showed that Mr. Ceglia's claim that he and Mr. Zuckerberg signed a "Work for Hire" document in April 2003 was impossible.

Mr. Zuckerberg, said Facebook's lawyers, did not conceive of the idea of the social media company until December that year.


"There is no evidence whatsoever that Mr. Zuckerberg had so much as thought of Facebook as early as April 2003, let alone was sufficiently advanced in his thinking that he would sell ownership interests in the venture," lawyers for Mr. Zuckerberg and Facebook wrote.

"This fact alone conclusively establishes that the 'Work for Hire' document is a forgery," the filing said.

In an emailed statement, Mr. Ceglia's lawyers said Facebook was trying to end the lawsuit before a jury had seen all the evidence. They said the evidence includes experts' declarations favorable to their client about the authenticity of his contract with Mr. Zuckerberg.

"Mr. Ceglia deserves his day in court, where the jury will resolve this dispute over the ownership of Facebook," the statement said.

Facebook cites emails showing that Mr. Zuckerberg was angry with Mr. Ceglia because he had received only $9,000 out of $19,500 owed for work on StreetFax. Facebook's lawyers say Mr. Ceglia in early 2004 sent emails in which he apologized for failing to pay Mr. Zuckerberg and pleaded for his patience.

"The numerous emails in which Ceglia begs for forgiveness and forbearance put the lie to the fictional narrative in his fabricated 'emails' in which he and Zuckerberg have an equal partnership and Ceglia angrily presses Zuckerberg for payment," the motion to dismiss said.

"If Ceglia in fact had leverage over Zuckerberg, as he has alleged, it is utterly implausible that Ceglia would have begged Zuckerberg for extra time to raise money to pay a small debt."

The case is Ceglia vs. Zuckerberg et al., U.S. District Court, Western District of New York, No. 10-00569.