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Prosecutors Say Scam Targeted Facebook's Zuckerberg

SAN FRANCISCO - A New York man with a shady past was arrested on Friday for using a forged contract with Facebook co-founder Mark Zuckerberg to lay claim to half of the world's leading online social network.

Paul Ceglia, 39, faces a pair of fraud charges that each carries a maximum sentence of 20 years in prison, according to federal prosecutors.

"By marching into federal court for a quick payday based on a blatant forgery, Paul Ceglia has bought himself another day in federal court for attempting a multi-billion-dollar fraud against Facebook and its CEO," said US Attorney Preet Bharara.

A suit pursued by Ceglia with help from lawyers at DLA Piper contended that he hired then Harvard University student Mark Zuckerberg in 2003 to do software coding for a StreetFax website and wound up providing seed money for what Zuckerberg than called "the face book."

Evidence presented by Ceglia, whose background includes criminal charges for fraud and a conviction for possession of hallucinogenic mushrooms, included a signed contract and email exchanges.

DLA Piper defended the integrity of the email when the filing was amended in court last year, saying it conducted tests to confirm the exchanges were not altered.

Ceglia maintained that he forgot about the matter until coming across the contract while defending himself against charges that he defrauded customers of his wood pellet business.

Prosecutors said that an investigation revealed that the contract and emails were bogus.

Ceglia replaced the first page of a two-page contract with Zuckerberg for StreetFax software work, then "doctored, fabricated and destroyed evidence to support his false claim," according to the US Attorney's office.

A search of one of Ceglia's computer hard drives uncovered a copy of the real contract, which "does not refer to Facebook in any fashion, let along give Ceglia a 50-percent interest in it," prosecutors said.

Facebook lawyers have denounced Ceglia's lawsuit as a fraud from the outset.