Paul Ceglia: The Man Who Would Have Facebook

Is Paul Ceglia a sleazy grifter, Mark Zuckerberg's long-lost angel investor, or both?

Illustration by David Saracino.

PAUL CEGLIA IS A PUDGY 38-YEAR-OLD, with greasy black hair and creases around his light brown eyes, a serial small-time entrepreneur who could sell you the Brooklyn Bridge. “He’s got tremendous confidence,” said Bill Castle, an upstate hotelier and one of Mr. Ceglia’s many bilious former business partners. “Smiles all the time, got this award-winning smile. Even when under pressure, he continues to smile.”

Mr. Ceglia piqued the nation’s curiosity when he filed a lawsuit last year in the Supreme Court of New York’s Allegany County claiming 84 percent ownership of Facebook; he piqued Betabeat’s when we read that he had been arrested for felony possession of magic mushrooms in Texas, claimed to have founded a natural burial cemetery in Ithaca and once operated an ice cream shop.

He also ran a video rental store, flipped real estate on eBay and owns a wood pellets company that was shut down by the Attorney General due to allegations of fraud. He’s currently working on a prototype of a “refrigerator/cookstove for use in developing nations,” he told the Wellsville Daily Reporter.

While none of his schemes have been especially lucrative so far, one failed venture may yet make him rich: StreetFax.com, a database of street photographs that Mr. Ceglia intended to license to insurance companies for use in evaluating claims, was built in part with code written by a young for-hire developer named Mark Zuckerberg. A 2003 contract with the programmer, now better known as the founder of Facebook, is the basis of Mr. Ceglia’s claim that he is entitled to half of the company.

Mr. Ceglia has so far been less of a nuisance for Facebook and its legal staff than the Winklevoss twins, Tyler and Cameron, whose claim that Mr. Zuckerberg stole the idea for Facebook from them during his Harvard days formed the basis for the Oscar-winning film The Social Network and netted them a settlement of $65 million.

Mr. Ceglia’s much simpler assertion is essentially that he helped to fund Mr. Zuckerberg’s work on Facebook in the early days of its development, and is therefore entitled to a share of  the company. Mr. Zuckerberg affirms he signed a contract concerning StreetFax after answering Mr. Ceglia’s Craigslist ad. But according to Mr. Ceglia, Mr. Zuckerberg also approached him seeking funding for another project he was working on: “The Facebook,” as the site was originally called. Mr. Ceglia says he gave Mr. Zuckerberg at least $1,000 for the project. (“He actually felt bad because Mark was making him so much money [on StreetFax],” a friend said.) According to Mr. Ceglia, the two men drew up a contract giving Mr. Ceglia half of “The Facebook,” and more if the project was not completed by January 1, 2004.

Mr. Ceglia’s filings with the court include a copy of a paper contract that refers to Facebook and excerpts from emails Mr. Ceglia claimed he’d saved by copying and pasting the text into Microsoft Word. In the purported emails, Mr. Zuckerberg and Mr. Ceglia renegotiated for an even 50-50 partnership before Mr. Zuckerberg called The Facebook a flop and said he wanted to refund Mr. Ceglia’s money. Mr. Ceglia claims he did not take the money back, electing to write off the affair as a loss.

Facebook says the contract and emails are forged. The company filed what it says is the authentic contract, which it found on Mr. Ceglia’s computer and on a computer at the law firm Sidley Austin. That contract only mentions StreetFax.

Mr. Ceglia has taken a thrashing in the media and run through three law firms, all of which declined to say why they’d dropped him as a client. But a year and more than 100 filings later, his case is still ongoing.

Orin Snyder, attorney for Mark Zuckerberg and Facebook, does not sound like someone looking to negotiate a settlement. “Irrefutable forensic evidence confirms that this case is a fraud,” he told Betabeat. “Ceglia continues to abuse the judicial process by refusing to comply with multiple court orders.  We will ask the court to dismiss this case and impose sanctions after Ceglia produces the emails and other evidence that he has been concealing.”

Meanwhile, Mr. Ceglia is already hatching plans for taking Facebook to the next level. “I’m starting to have all sorts of opinions as to what I’ll do when I’m at the helm,” he wrote in an email to Emil Protalinski of the tech blog ZDNet, one of a handful of press interviews he’s given in the past year (the others were to the Wellsville Daily Reporter and the Irish local paper The Connacht Sentinel). He also told reporters he’d be willing to hire Mr. Zuckerberg.

Paul Ceglia: The Man Who Would Have Facebook