Sanctions, Legal Fees Piling Up for Man Claiming Facebook Ownership

Paul Ceglia

The man who claims a 50 percent stake in Facebook was ordered Thursday to pay the social-networking site’s attorneys an additional $16,851, bringing to nearly $97,000 in sanctions and fees a federal judge has levied against Paul Ceglia in a bizarre lawsuit over the company’s origins.

The order from U.S. Magistrate Leslie Foschio comes in a lawsuit Ceglia brought against Mark Zuckerberg, Facebook’s chief. Ceglia claims a 2003 contract between him and Zuckerberg, allegedly crafted while Zuckerberg was a Harvard University student, promised him half of the company. It’s a contract that Zuckerberg and Facebook’s forensic experts have maintained is forged.

The $97,000 likely means little to Facebook monetarily as it is preparing for a $100 billion IPO that could net Zuckerberg $1 billion. But Facebook has shown no sign that it is willing to pay Ceglia to go away — as it did with the Winklevoss twins who accused Zuckerberg of stealing their idea after they hired him to help code their own social network.

The sanctions and fees (.pdf) against Ceglia began piling up in January, when a judge ordered the Buffalo wood-pellet salesman to pay $5,000 for stonewalling an order to provide his passwords to e-mail accounts so Facebook’s forensics experts could examine them. Facebook’s investigators say those accounts included an original engineering contract between the two that didn’t involve Facebook.

Along with the original $5,000 sanction, a judge tacked on an additional $75,776, at Facebook’s request, to pay for Facebook’s legal bills while trying to enforce the original order that Ceglia produce his e-mail and passwords.

Adding salt to a wound, Magistrate Foschio on Thursday added another $16,851 to the tab (.pdf), for Facebook’s expenses “incurred preparing and defending the initial fee application.”

Ceglia has two weeks to pay the money, or to provide his tax returns and financial statements proving he can’t afford it.