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Feds arrest Paul Ceglia for alleged multibillion-dollar fraud against Facebook

Ceglia, a man who claims he should own half of Facebook, faces up to 40 years in prison for allegedly doctoring a contract and creating fake emails in his suit against CEO Mark Zuckerberg.

Donna Tam Staff Writer / News
Donna Tam covers Amazon and other fun stuff for CNET News. She is a San Francisco native who enjoys feasting, merrymaking, checking her Gmail and reading her Kindle.
Donna Tam
2 min read
Paul Ceglia's Facebook profile photo. Facebook

The feds have arrested and charged Paul Ceglia, the man who claims he owns half of Facebook

, with mail and wire fraud for allegedly doctoring a contract and creating fake emails in an attempt to cheat Facebook and CEO Mark Zuckerberg out of billions of dollars, a U.S. district attorney revealed today.

He faces up to 40 years in prison for the two charges, which relate to Ceglia using the U.S. Postal Service and email to transmit the materials, according to the complaint (see below).

Federal agents arrested Ceglia at his home in Wellsville, N.Y., this morning after an investigation found that Ceglia allegedly presented fake evidence to a court in a lawsuit against the social network and its founder. He will make a court appearance this afternoon in New York.

Ceglia's 2010 lawsuit claims he hired Zuckerberg through a Craigslist ad in 2003 to write code for a project called StreetFax and paid Zuckerberg $1,000 for coding work; he also allegedly invested $1,000 in Zuckerberg's The Face Book project, which he claims gives him a 50 percent interest in the company.

Manhattan U.S. Attorney Preet Bharara alleges that Ceglia inserted a fake page into a contract signed by him and Zuckerberg to give the appearance that Zuckerberg promised Ceglia 50 percent ownership in the company. Ceglia also allegedly made up fake emails that illustrated Zuckerberg offering Ceglia money and discussing Facebook details.

Federal investigators searched Ceglia's hard drives and found the original contract between Zuckerberg and Ceglia, which they reported "does not refer to Facebook in any fashion, let alone give Ceglia a 50 percent interest in it," according to a press release.

See the complaint below.