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Judge recommends dismissal of Paul Ceglia's Facebook lawsuit

Judge says there is clear evidence that the 2003 contract that Ceglia claims gives him half interest in the social network was a "recently created fabrication."

Paul Ceglia Facebook profile photo.

Paul Ceglia's lawsuit claiming a half ownership in Facebook may be nearing an end after a federal magistrate recommended today that it be dismissed.

U.S. Magistrate Judge Leslie G. Foschio in Buffalo, N.Y., said today there is clear evidence that the 2003 contract under which Ceglia claims a half interest in the social-networking giant was a "recently created fabrication" and recommended that the case be dismissed by U.S. District Judge Richard J. Arcara.

"Today's federal court decision confirms what we have said from day one: this lawsuit is an inexcusable fraud based on forged documents," Colin Stretch, Facebook's deputy general counsel, said in a statement. "We are pleased the court agrees."

CNET has also contacted Ceglia attorney Paul Argentieri for comment and will update this report when we learn more.

In a 2010 lawsuit filed against Facebook and CEO Mark Zuckerberg, Ceglia claimed that Zuckerberg entered into a contract with Ceglia in 2003 to design and develop the Web site that would ultimately become Facebook.

Ceglia has said he hired Zuckerberg through a Craigslist ad to write code for a project called StreetFax and paid Zuckerberg $1,000 for coding work; he also presented a contract he claimed showed a $1,000 investment in Zuckerberg's The Face Book project that gave him a 50 percent interest in the company.

Ceglia cited more than a dozen e-mails purportedly between himself and Zuckerberg that detail discussions on design, development, business plans, and eventual contract disputes regarding The Face Book.

Facebook acknowledged that Zuckerberg signed a contract to work on StreetFax but initially said it believed the Facebook contract was a "likely" forgery. It has since called the contract an "outright fabrication" and a "cut-and-paste job."

In his 155-page recommendation to Arcara, Foschio said Ceglia's arguments consisted of "self-defeating inconsistencies, serving only to establish the fraudulent nature" of the contract and supporting e-mails.

"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.

Federal prosecutors had already reached a similar conclusion, arresting Ceglia at his Wellsville, N.Y., home last October and charging him with mail and wire fraud for allegedly doctoring the contract and creating fake e-mails related to the case. He faces up to 40 years in prison if convicted of both charges, which relate to Ceglia using the U.S. Postal Service and e-mail to transmit the materials.

In addition to criminal charges, Ceglia has faced a bizarre set of challenges in his civil case against Facebook and Zuckerberg. Since filing his case two years ago, Ceglia has gone through a handful of lawyers and been fined more than $80,000 by the court, which voiced suspicion that Ceglia was purposely trying to stall legal proceedings in the case.