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Tuesday, June 18, 2024 | Back issues
Courthouse News Service Courthouse News Service

Facebook Sues DLA Piper|on Paul Ceglia Headache

MANHATTAN (CN) - Billionaire Mark Zuckerberg sued the international law firm whose client is charged with trying to cheat him of half his Facebook fortune.

Paul Ceglia, of Wellsville, N.Y., first met Zuckerberg in 2003 when the White Plains native answered an ad to code Ceglia's now-defunct website StreetFax for $1,000.

Zuckerberg launched Facebook in early 2004 from his Harvard dormitory and was slapped with a federal lawsuit from Ceglia in Buffalo seven years later, just as he was settling ownership claims to his social-networking empire from his former classmates, the Winklevoss twins.

Represented by Paul Argentieri, Ceglia claimed that the StreetFax contract came with a clause entitling him to an 84 percent equity stake in Facebook.

When Zuckerberg later produced evidence that Ceglia had forged documents to support his case, a federal magistrate in 2011 had to order Ceglia back to the United States from Ireland.

Federal prosecutors indicted Ceglia the next year for an alleged multibillion fraud scheme. Compounding extensive delays in the case, a federal judge recently allowed postponement of the trial date to May 4, 2015.

Ceglia's civil suit against Facebook and Zuckerberg crumbled shortly after his indictment.

U.S. Magistrate Judge Leslie Foschio called it "highly probable and reasonably certain that the Work for Hire Document and the supporting e-mails were fabricated for the express purpose of filing the instant action."

As Ceglia appeals that decision, Zuckerberg and Facebook filed suit Monday in New York County Supreme Court against Ceglia's legal team.

Among the roughly one dozen lawyers and firms named in the 37-page complaint, the most prominent defendant is the international law firm DLA Piper, which boasts a team of 4,200 lawyers in more than 30 countries.

The firm's attorneys "knew or should have known" that Ceglia's suit was a fraud, Zuckerberg says.

"The contract on which the lawsuit was based was an obvious forgery, rife with historical impossibilities and other red-flags for fraud," the complaint states. "For example, the document bore the date April 2003, even though it was public knowledge that Zuckerberg conceived of Facebook months later in or around December 2003. The document contained numerous font and formatting inconsistencies indicating that the original text had been altered. Facebook and Zuckerberg repeatedly stated in public and in court that the contract was a fake. Yet Ceglia and his lawyers used this forgery to maintain their fraudulent lawsuit for nearly four years."

DLA Piper "publicly staked its reputation on the veracity of Ceglia's allegations" by having a senior lawyer tell the Wall Street Journal that he was "100 percent" certain that the contract was authentic, according to the complaint.

Facebook and Zuckerberg want the lawyers to pay treble damages for malicious prosecution and deceit and collusion with intent to deceive a court.

The social-networking czar is represented by Avraham Moskowitz of Moskowitz & Book.

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