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Ceglia: Getting arrested spurred my Facebook suit

Man claiming to own 84 percent of Facebook says he'd forgotten he ever employed Mark Zuckerberg--until state troopers arrested him for fraud in a wood-pellet business.

In a twist that makes the whole story sound like the Coen brothers penning an episode of "Arrested Development," New York resident Paul Ceglia claimed in an interview with Bloomberg published Monday, that he might never have found the musty old papers containing proof that he owns 84 percent of Facebook--except that last fall, state troopers dispatched by the office of state attorney general Andrew Cuomo arrived at his house to arrest him for fraud in the wood-pellet business, and he was forced to unearth various old paperwork.

You heard that right.

"If this thing hadn't happened the way it happened, no way I would have ever started looking through these ancient folders," Ceglia said in the Bloomberg interview as he addressed the question of why it took so long for him to raise the issue of what he says is a contract with Facebook CEO Mark Zuckerberg--then an 18-year-old doing freelance developer work--that commissioned Zuckerberg to develop something called "The Face Book" and entitles Ceglia to a percentage of the final product that he says has grown incrementally to 84 percent. "That contract would just be sitting in there gathering dust."

Ceglia reportedly said had been arrested last October in his home in rural Allegany County, N.Y., when more than two dozen customers of his wood-pellet home heating start-up business claimed that they had paid for fuel that they'd never received. He says that this happened because of unexpected demand and equipment failure, and that he and his wife (who co-owned the business) did not intend to defraud anyone. Ceglia's record also contains a 1997 arrest in Carthage, Texas, for possession of hallucinogenic mushrooms.

In 2003, according to his complaint, Ceglia was working on a project called StreetFax and paid Zuckerberg $1,000 for coding work; he also allegedly invested $1,000 in Zuckerberg "Face Book" project, which gave him a 50 percent interest in the company as well as an additional 1 percent interest for every day after January 1, 2004 that "The Face Book" was delayed.

Facebook's dismissal of the Ceglia affair has grown more and more forceful since the whole thing first emerged earlier this month. At first, a company lawyer was quoted as saying that the company was "unsure" as to whether Zuckerberg had ever signed such a contract. Slightly over a week ago, Facebook's statement said that the company "strongly suspect(s) the contract to be forged." In a statement provided to Bloomberg in conjunction with its Monday article, Facebook said that the "lawsuit is frivolous, if not outright fraudulent" and "the copy (of the contract) we've seen is a forgery."

OK, scratch the prior assertion--Ethan and Joel Coen could write way better dialogue.