Accused Facebook Fraud Fugitive Still Missing, US Appeals Court Hears

A lawyer for a New York man who disappeared ahead of his criminal trial over charges he tried to defraud Facebook Inc founder Mark Zuckerberg told a U.S. appeals court his client was like the fugitive protagonist of "Les Misérables."

Joseph Alioto, the lawyer for Paul Ceglia, made the statement on Thursday as he urged the 2nd U.S. Circuit Court of Appeals in New York to revive Ceglia's civil lawsuit seeking half ownership of Facebook under a purported contract with Zuckerberg.

That lawsuit became the basis for a criminal case, in which prosecutors contend the contract was forged.

Ceglia was set to face trial on May 4 but disappeared in March, along with his wife, two children and his dog. Alioto told the 2nd Circuit he had no idea where Ceglia was now.

"It's very unfortunate, like Jean Valjean," said Alioto, referring to the central character of Victor Hugo's 1862 novel and the more recent Broadway musical.

Ceglia, 41, has been wanted since March 8, after his ankle bracelet was found removed at his Wellsville, New York, residence. The U.S. Marshals Service is offering a $5,000 reward for information leading to his arrest.

Ceglia was charged in 2012 with fraud for forging documents to extort Zuckerberg out of 50 percent of Facebook, whose market value as of Wednesday's close was about $231 billion.

That case stemmed from a 2010 lawsuit against Facebook and Zuckerberg in Buffalo, New York, in which Ceglia said Zuckerberg, then a student at Harvard University, signed a contract giving him half of a planned social networking website.

U.S. District Judge Richard Arcara last year dismissed Ceglia's lawsuit after another judge said the contract was doctored.

Alioto on Thursday said that was the wrong decision and that the case should go to trial.

"There was substantial evidence showing the document was authentic," he said.

Orin Snyder, Facebook's lawyer, countered that Arcara had authority to dismiss the "litigation fraud" that Ceglia was pursuing.

"It's brazen, premeditated and unprecedented in scope," Snyder said, referring to Ceglia's civil lawsuit.

The 2nd Circuit also heard arguments over whether to revive Ceglia's separate and previously dismissed lawsuit to block the criminal case.

The case is Ceglia v. Zuckerberg, 2nd U.S. Circuit Court of Appeals, No. 14-1365.

© Thomson Reuters 2015