Facebook Inc. said its inspection of computers turned over by Paul Ceglia, the western New York man who claims he’s entitled to half of Chief Executive Officer Mark Zuckerberg’s holdings in the social-networking company, shows “smoking gun” evidence of fraud.

Ceglia sued Facebook and Zuckerberg last year, claiming that a two-page contract Zuckerberg signed in 2003 gave Ceglia half of the company when the service was started the following year. Palo Alto, California-based Facebook has grown to become the world’s biggest social-networking site.



U.S. Magistrate Judge Leslie Foschio in Buffalo, New York, last month ordered Ceglia to let Facebook run forensic tests on his computers, hard drives and electronic storage media, as well as on the contract and the e-mail he says support his claim.

“Defendants have uncovered smoking-gun evidence that the purported contract at the heart of this case is a fabrication,” Facebook said in its court filing late yesterday.

In a publicly filed version of the motion papers, Facebook, citing a confidentiality order in the case, didn’t identify the evidence it says was “embedded in the electronic data on Ceglia’s computer.”

Paul Argentieri, a lawyer for Ceglia, declined to comment on Facebook’s claim, citing Foschio’s July 13 confidentiality order.

$69.2 Billion

Facebook is valued at as much as $69.2 billion, according to Sharespost.com, an online marketplace for investments in companies that aren’t publicly traded.

Facebook’s “smoking gun” claim comes in the context of a court battle between the parties over the pretrial exchange of evidence in the case.

On July 1, Foschio entered several orders requiring Ceglia to turn over evidence for testing by Facebook after the company argued Ceglia’s case was a “fraud on the court.” Foschio also ordered Facebook to produce samples of Zuckerberg’s signature and 176 e-mails from Zuckerberg’s Harvard University e-mail account.

Both sides filed papers claiming the other side has failed to comply fully. Facebook also said Ceglia abused Foschio’s protective order by designating all 120 relevant items found on Ceglia’s computers, CDs and floppy disks as confidential. Facebook said it wants the “smoking gun” and other materials made public.

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