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Remember Paul Ceglia?He’s the guy who startled everyone two summers ago by producing a “contract” in which he says Mark Zuckerberg signed over a 50% ownership interest in Facebook to him back in the spring of 2003.
This claim was startling in part because Zuckerberg didn’t create Facebook until early 2004–and in part because Ceglia was a wood-pellet salesman in upstate New York who waited 7 years to say anything.
The claim seemed extremely unlikely, to say the least.
Facebook quickly denounced it as absurd and pointed out that Ceglia had recently been accused of swindling his wood-pellet customers. Facebook also declared Ceglia’s contract to be a forgery.
Ceglia responded by hiring a big, badass law firm, DLA Piper, and releasing a trove of “emails” between him and Zuckerberg that he said proved that his deal with Zuckerberg had been real.
Facebook then unleashed a team of forensic investigators who found that Ceglia had previously been accused of swindling other people and said they had found evidence that Ceglia’s contract and all of the emails were just a gigantic fraud.
Ceglia had no persuasive response to the findings of Facebook’s investigators. Shortly after Facebook filed them, Ceglia’s big law firm quit in disgrace.
Then a second lawyer Ceglia hired quit.
Then, with Facebook urging the Court to charge Ceglia with criminal fraud for fabricating the emails and contract, Ceglia went into hiding in Ireland.
So the only logical conclusion seemed to be that Ceglia had, in fact, forged the contract and emails and was now, pathetically and outrageously, trying to extort money from Facebook.
And that is still probably what’s going on.
But there have been a couple of new developments in the case.
First, Ceglia and his remaining attorneys have finally found another law firm to take the case, at least temporarily. The firm is Milberg, which may ring a bell. Milberg is a surviving piece of a bigger law firm called Milberg Weiss that was the king of shareholder lawsuits for decades. Milberg Weiss split in half a few years ago after some of the firm’s partners were charged with paying plaintiffs to bring cases against companies.Second, Ceglia has unleashed his own forensic investigators. These investigators have:
- Examined the original paper contract between Ceglia and Zuckerberg
- Examined some drives that supposedly contained text from some Ceglia-Zuckerberg emails
- Given Ceglia a lie-detector test
As described below, the investigators’ findings do not prove Ceglia’s case, by any means. And they do not directly refute the conclusions of Facebook’s forensic investigators. What they do do, however, is make it harder for a neutral observer to instantly dismiss Ceglia’s claim as a fraud.
And it is this last factor, presumably, that persuaded Milberg to take the case.
Cases like this rarely go all the way through the trial process, because it’s hard (and risky) to predict what juries will do. Cases like this are generally settled before juries reach a verdict. And it’s likely that a big settlement is what Milberg is playing for.
Milberg’s hope, presumably, is that Facebook will not want to risk even the remotest possibility of a nightmare in which someone could be granted ownership of up to half of the company, especially while it’s preparing to go public. Milberg is presumably hoping that it can scare Facebook into paying Milberg tens of millions or hundreds of millions or even billions of dollars to make Ceglia go away.
And, regardless of the truth, the findings of Ceglia’s forensic investigators probably modestly increase the odds that a settlement is ultimately what will happen.
What did Ceglia’s investigators find?
A Milberg spokesman summarizes the findings below.
The findings do seem to cast doubt on one of Facebook’s assertions, which is that the paper “contract” Ceglia produced was forged by replacing the real front page of a real contract with a forged front page.
The findings do not, however, address the most persuasive evidence found by Facebook’s investigators–namely, the ongoing existence of a trove of emails between Zuckerberg and Ceglia on Harvard’s email servers–a cache that included ~175 real emails and NONE of the “emails” that Ceglia produced to prove his case against Zuckerberg.
In light of the latter finding, the only way Ceglia’s story could be true is if Mark Zuckerberg manually deleted each and every one of the emails that Ceglia produced in an effort to hide the agreement between the two.
This seems extremely unlikely.
But Milberg is presumably hoping that a reasonable jury could conclude that “extremely unlikely” is not the same as impossible.
Below is a summary of the investigators’ findings, as summarized by a Milberg spokesman. (If you haven’t read the background on this bizarre case, read these posts first: “The Guy Who Says He Owns Facebook Just Filed A Boatload Of New Evidence–And It’s Breathtaking” and “OK, WE’RE CONVINCED: The Guy Who Says He Owns Facebook Is A Fraud“):
Questions and Answers About Evidence in Paul Ceglia’s Case
Is the “Facebook Contract,” dated April 28, 2003, authentic? defence counsel asserts that “Ceglia appears to have taken page 2 of the signed StreetFax contract and appended it to a doctored version of page 1, which Ceglia has edited by adding reference to “The Face Book.” 6/2/11 Defendants’ Memorandum of Law in Support of their Motion for Expedited Discovery, ECF No. 45, p. 8.
- Is page 1 of the “Facebook Contract” inconsistent with page 2, and was it created after April 28, 2003?
Larry Stewart, a “Chief Forensic Scientist,” provided “preliminary observations and findings” following his “physical examination of the Facebook Contract.” 11/3/11 Declaration of Larry E. Stewart in Support of Motion for Sanctions Against Defendants for Spoliation of Evidence (“Stewart Decl.”), ECF No. 209, ¶¶ 3, 11, 30.
- Stewart “found that the two pages were consistent in coloration and surface texture.” Stewart Decl. ¶ 32 (emphasis added).
- “One of the tests [Stewart] conducted was a physical examination of the folds in the pages and the staple holes found on the pages of the Facebook Contract.” Stewart Decl. ¶ 50. “After those preliminary examinations, [he] found no reason to suggest page substitution.” Stewart Decl. ¶ 51 (emphasis added).
- Stewart also “conducted a chemical analysis of the toner found on the pages of the Facebook Contract.” ¶ 54. “Preliminary test results indicate that the toner found on page 1 matches that found on page 2.” Stewart Decl. ¶ 55 (emphasis added).
- According to Stewart, “the toner was . . . found to be consistent with toner from a Hewlett Packard (HP) 1100/3200 series printer . . .” Stewart Decl. ¶ 56. He further stated that: “The HP 1100 series printer was first introduced to the public in 2001 and they were discontinued in May of 2005” and “[t]he HP 3200 series printer was first introduced to the public in 2000 and they were discontinued in March of 2002.” Stewart Decl. ¶¶ 58, 59 (emphasis added).
James A. Blanco, a “Forensic Document Examiner,” also provided “preliminary filings . . . based upon [his] examinations and analysis of the original Facebook Contract.” 10/31/11 Declaration Of James A. Blanco In Support Of Motion For Sanctions Against Defendants For Spoliation Of Evidence (“Blanco Decl.”), ECF No. 194, ¶ 2, 21.
- He “examined the staple holes at the upper left-hand corner of both pages of the Facebook Contract and . . . determined that the staple holes on both pages align demonstrating that these two pages of the Facebook Contract have only been stapled one time wherein they were actually stapled together.” Blanco Decl. ¶ 21(b) (emphasis added).
- There is a handwritten addition to page 1 of the Facebook Contract, written in ink. Blanco noted that: “The impression from the handwritten interlineation appearing on page one is present as a latent handwriting impression on page two. What that means is that page one was over the top of page two at the time that the handwritten interlineation was made on page one.” Blanco Decl. ¶ 21(c) (emphasis added).
- Blanco “measured both pages of the Facebook Contract and each page measured at “.011 thousands.” Blanco Decl. ¶ 21(d). He also “examined the opacity and the coddling features (texture) of pages 1 and 2 of the Facebook Contract and these features were the same between both pages.” Blanco Decl. ¶ 21(e). He concluded that “[n]one of these examinations revealed evidence to suggest that page 1 had been substituted out for some supposed other previous page 1 for the Facebook Contract.” Blanco Decl. ¶ 22 (emphasis added).
- Did Zuckerberg sign the Facebook Contract?
- Blanco “evaluated the signature on page two of the Facebook Contract and confirmed, by comparison to other legal documents signed by Mr. Zuckerberg in other cases, that the signature on page two of the Facebook Contract is Mr. Zuckerberg’s.” Blanco Decl. ¶ 21(a) (emphasis added).
- Are the email exchanges between Zuckerberg and Ceglia, quoted in the complaint, authentic?
Background: Paul Ceglia asserts that he exchanged emails with Zuckerberg during the 2003-2004 time frame. Ceglia copied the text of certain of those emails to word processing files, some of which were saved onto floppy disks. Excerpts from certain of those emails are included in the Complaint. 4/11/11 First Amended Complaint, ECF No. 39, ¶¶ 32-55.
Jerry Grant, a “Certified AccessData Forensic Examiner,” analysed the “forensically relevant data” to determine if it matched Ceglia’s claim of copying and pasting emails into documents in the 2003-2004 time frame.
- Grant “received 41 floppy disks for review,” and “determined that the first 2 were relevant to this matter.” 11/16/11 Declaration of Jerry Grant (“Grant Decl.”), ECF No. 226, ¶¶ 2, 9, 10. These floppy disks included emails. See Grant Decl. ¶ 11(r) (addressing “Pasted E-Mail header contents”). Specific findings include:
- Grant examined “Slack Space” to “look for pieces of deleted data to compare to the actual files on the floppy disk to uncover evidence of file versions/editing” and noted “nothing was found to indicate that.” Grant Decl. ¶ 11(i).Grant examined “Temporary Files,” and “nothing was found to indicate other edited versions of any document relevant to fraud.” Grant Decl. ¶ 11(j).
- Grant looked for: “File Allocation Tables,” “File Dates/Times,” “Metadata Dates/Times,” “All Other Metadata Fields,” “Fonts Used,” ‘Allocated Space,” “Unallocated Space,” “Carved Files,” “Carved Folders,” “File Header Information,” “File Comparisons for changes,” “Versions of Programs/Documents,” “OLE Streams (Individual Components of Documents),” “0 Length Files (Remnants of deleted files),” “Pasted E-Mail header contents,” “RTF [Rich Text Format] Specification Versions and Dates,” and “Doc Binary File Format Specification Versions and Dates.” For each of these factors, Grant stated that “no discrepancies existed that would indicate fraud,” “nothing was located that would indicate fraud,” “nothing was found to indicate fraud,” “nothing was found indicating fraud,” “nothing indicated any signs of fraud” and/or “nothing was located to indicate any fraud.” Grant Decl. ¶¶ 11(a)-(c), (e)-(h), (k)-(q), (s)-(t).
- Grant examined the “Total Edited Time Metadata Field” of “forensically relevant items,” and determined that “the content of the documents was large compared to the logged editing time which is consistent with the pasting of data from the clipboard instead of typing or manually editing the content.” Grant Decl. ¶ 11(d).
- 4. Could Ceglia pass a polygraph test?
Michael Pliszka, an “experienced polygraph examiner and former law enforcement officer,” “was asked to conduct a polygraph examination of Paul Ceglia, paying particular attention to the authenticity of the ‘Work for Hire’ Contract . . . .” 6/16/11 Declaration of Michael Pliszka in Support of Plaintiff’s Opposition to Defendants’ Motion for Expedited Discovery and In Support of Plaintiff’s Cross-Motion for Mutual Expedited Discovery (“Pliszka Decl.”), ECF No. 63, ¶¶ 2, 4.
- Pliszka “observed Mr. Ceglia to be alert and well oriented” and the “Calibration Verification of Sensitivity (“CVOS”) . . . determined that Mr. Ceglia was a suitable candidate for a polygraph examination.” Pliszka Decl. ¶ 6.
- The questions asked during the polygraph examination were designed to determine whether Mr. Ceglia had fraudulently forged or doctored the Agreement. Pliszka Decl. ¶ 8.
- Pliszka opined that “the examination results are classified as ‘No Deception Indicated'” and noted that “No Deception Indicated is indicative of an individual telling the truth.” Pliszka Decl.¶ 9, 10.
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