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Take on Facebook face fraud charges

by on10 March 2014

Pesky kids

A New York businessman must face criminal fraud charges for trying to claim a billion-dollar stake in social media company Facebook. Paul Ceglia, 40, thought he would get billions if he forged a contract with Facebook CEO Mark Zuckerberg that supposedly entitled him to part ownership of the company.

After an hour-long hearing in New York, US District Judge Andrew Carter rejected Ceglia's request to throw out the charges, finding he had failed to meet the "high standard" needed to dismiss a grand jury indictment. Ceglia sued Zuckerberg and Facebook in 2010 in a federal court in Buffalo, New York, claiming that he and Zuckerberg had signed a contract while Zuckerberg was a freshman at Harvard University. Ceglia invested $1,000 in a planned social networking website Zuckerberg had.

Facebook has argued that the only contract between the two men was related to Ceglia’s company and accused Ceglia of faking various documents as part of his lawsuit. Ceglia's lawsuit was dismissed because it was "highly probable and reasonably certain" that the contract was fabricated in order to pursue the lawsuit. Prosecutors in New York charged Ceglia in 2012, accusing him of forgery. Ceglia has not given up he has filed a separate lawsuit against Manhattan U.S. Attorney Preet Bharara, whose office is prosecuting Ceglia, and US Attorney General Eric Holder seeking to halt the criminal case.

Ceglia's defense attorney, David Patton, argued that the government should be barred from prosecuting him for allegations he made in the context of a civil lawsuit, warning that it could discourage litigants from filing claims. True, but it would also stop people faking documents in civil cases too.

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