Ceglia case against Facebook dismissed by federal judge

A federal judge dismissed a lawsuit filed by New York businessman Paul Ceglia against Facebook Inc and its founder Mark Zuckerberg, adopting findings by a magistrate judge that a purported contract entitling him to an ownership stake in the company was fake, according to court documents.

Ceglia's 2010 lawsuit against Facebook and Zuckerberg underlay a subsequent federal prosecution in Manhattan, in which Ceglia was accused of forging a 2003 contract with Zuckerberg that supposedly entitled him to a part-ownership interest in the social networking company.

Facebook argued that the only contract between the two men was related to Ceglia's company, StreetFax.com, and accused Ceglia of faking various documents as part of his lawsuit. Zuckerberg had previously done some programming work for StreetFax.com.

U.S. District Judge Richard Arcara in Buffalo, New York, on Tuesday dismissed Ceglia's lawsuit, on the grounds that the contract was a "fabrication" and alternatively due to evidence spoliation.

"Today's ruling vindicates what we have said from the outset: this case is a fraud," Colin Stretch, Facebook's general counsel told Reuters in an e-mail.

The judge in a separate ruling Tuesday dismissed a lawsuit by Ceglia seeking to prevent Manhattan U.S. Attorney Preet Bharara from prosecuting him over conduct in the lawsuit over the Facebook ownership stake.

The decision followed a ruling earlier this month by a federal judge in Manhattan refusing to dismiss an indictment charging Ceglia with mail and wire fraud.

Civil lawyers and criminal defense lawyers for Ceglia were not available for comment.

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

The criminal case is U.S. v. Ceglia, U.S. District Court, Southern District of New York, No 12-cr-00876.

© Thomson Reuters 2014