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Ceglia ordered to produce lawyer's Facebook 'fraud' letter

Confidential letter from one of Ceglia's former law firms says it withdrew from the case after determining the purported contract with Facebook co-founder Mark Zuckerberg is a fraud.

A federal judge has ordered Paul Ceglia, the man who claims he's entitled to half ownership of Facebook, to produce a letter that appears to support the social network's claim that his alleged contract is a fabrication.

U.S. Magistrate Judge Leslie G. Foschio today ordered the release of the letter, in which one of Ceglia's former law firms advises two other former Ceglia law firms that it had determined that the purported contract with Facebook co-founder Mark Zuckerberg was a fraud. Foschio also reprimanded Ceglia and his current lawyer, Dean Boland, for failing to produce the letter.

In today's ruling (see below), Foschio, of the U.S. District Court for the Western District of New York, used strong language in criticizing Ceglia and Boland for ignoring two previous court orders to produce the "Kasowitz letter."

"That the Kasowitz letter was never disclosed in a privilege log, given its obvious relevance to the issue of whether the contract at the heart of this litigation is genuine, is beyond cavil," Foschio said. "The attempt to goad the court into further review of the Kasowitz letter by its unsolicited submission to the court only served to further delay compliance with this court's orders."

"Such conduct is beyond disrespect and will not be countenanced," Foschio said in announcing sanctions against Ceglia and Boland. Foschio fined Ceglia and Boland both $1,000; Ceglia was sanctioned for failing to produce the letter as per previous orders, and Boland for interfering with the court's discovery process. The fine against Boland comes after Foschio expressed suspicion in June that Ceglia was purposely trying to stall the discovery proceedings.

The fines are the latest in a series of sanctions levied against Ceglia in the case. In February, Foschio ordered Ceglia to reimburse Facebook $75,766.70 in attorneys' fees related to the case. Those fees were ordered after Foschio imposed a $5,000 contempt sanction against Ceglia for delays in making e-mails available in his case against Facebook.

"Today's ruling imposing monetary sanctions on Ceglia and his lawyer demonstrate that they continue to show brazen contempt for the court," Facebook chief counsel Orin Snyder said in a statement. "It is bad enough that Ceglia is perpetuating a massive fraud on the court. His ongoing contempt makes it all the more reprehensible."

CNET has contacted Boland for comment and will update this report when we learn more.

Ceglia has gone through a series of law firms since he initially filed a lawsuit against Facebook and Zuckerberg in 2010. Ceglia claims he has a 2003 contract with Zuckerberg that shows he is entitled to 50 percent of the social-networking giant in return for a $1,000 investment.

Zuckerberg and Facebook have called the alleged Facebook contract a "cut-and-paste job" and described the purported e-mails as "complete fabrications."

Those allegations may be supported by the Kasowitz letter, a confidential letter sent by the New York law firm of Kasowitz, Benson, Torres & Friedman to the law firms of DLA Piper and Lippes Mathias Wexler Friedman, advising them it was withdrawing from the case after determining the contract was a fraud.

Foschio ordered Ceglia to produce the letter within three days of today's order.

Decision and Order Re Kasowitz letter