Judge recommends Ceglia case vs Facebook be dismissed

By Jonathan Stempel and Nate Raymond

(Reuters) - A federal magistrate judge has recommended the dismissal of a civil lawsuit in which Paul Ceglia, a former wood pellet salesman, claimed a huge ownership stake in Facebook Inc.

U.S. Magistrate Judge Leslie Foschio in Buffalo, New York, said on Tuesday that there is clear and convincing evidence that a 2003 contract under which Ceglia claimed a one-half interest in the social media company is a "recently created fabrication."

In October, Ceglia was criminally charged by federal prosecutors with mail and wire fraud in connection with the alleged forgery of documents related to Facebook.

Paul Argentieri, a lawyer for Ceglia, was not immediately available on Tuesday for comment.

In his civil lawsuit against Facebook and its chief executive, Mark Zuckerberg, Ceglia had claimed that a 2003 contract he signed with Zuckerberg, then a Harvard University freshman, entitled him to the stake.

Though Zuckerberg had done programming work for Ceglia's company StreetFax.com, Facebook maintained that Zuckerberg's agreement involving that entity, which did not entitle Ceglia to a big Facebook stake, was the real contract between the two.

In a 155-page recommendation, Foschio said Ceglia's arguments largely consisted of "self-defeating inconsistencies" that established the "fraudulent nature" of his claims.

"Plaintiff has utterly failed to rebut the plethora of evidence establishing that it is highly probable and reasonable the StreetFax document was the operative contract that governed the business relationship between plaintiff and Zuckerberg," the judge wrote.

Foschio also said it is "highly probable and reasonably certain" that the contract Ceglia said was real was "fabricated for the express purpose of filing the instant action."

The case now goes to U.S. District Judge Richard Arcara, who will decide whether to approve Foschio's recommendation.

Colin Stretch, deputy general counsel of Facebook, said in a statement that Foschio's recommendation "confirms what we have said from day one: this lawsuit is an inexcusable fraud based on forged documents."

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

(Reporting by Nate Raymond and Jonathan Stempel in New York; Editing by Leslie Adler)

Source: http://news.yahoo.com/judge-recommends-ceglia-lawsuit-vs-facebook-dismissed-213417957--sector.html

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