The Irish American businessman who claimed he was the majority shareholder in Facebook has been arrested for attempting to defraud the company and its founder Mark Zuckerberg.
Paul Ceglia has been charged with a multi-billion-dollar scheme to defraud Facebook and Zuckerberg.
The 39-year-old was arrested at his home in Wellsville, New York, charged with mail and wire fraud following an investigation by the US Postal Inspection Service.
Ceglia spent six years as a child living in Galway near his mother Veronica Keaveney’s family home in Corofin.
He lived in Ireland with his family for part of 2011 before he was ordered back to the US by a federal judge.
Ceglia filed a 2010 lawsuit in the US District Court in New York claiming that he owned 84% of Facebook, the social media website currently valued at $47 billion.
His lawsuit claimed that Zuckerberg signed over majority ownership of Facebook to Ceglia while he was at Harvard.
The Sunday Times reports that Ceglia claimed that Zuckerberg signed a contract with him in April 2003 in return for a $1,000 investment which was to be used to develop Facebook.
He said he was to get a 50% stake and an additional one percentage point in the business for every day that the site was not finished after the agreed completion date.
Facebook founder Zuckerberg has admitted meeting Ceglia but says the only contract signed was to develop a website for Ceglia’s business called Streetfax.
Prosecutors now claim that Ceglia doctored the contract to make it seem that it related to Facebook.
Officers say they have retrieved information from Harvard’s computer system that show spacing, columns and margins in the original contract differ from the fake contract that Ceglia presented as part of his lawsuit.
Manhattan US Attorney Preet Bharara said: “Ceglia’s alleged conduct not only constitutes a massive fraud attempt, but also an attempted corruption of our legal system through the manufacture of false evidence. Dressing up a fraud as a lawsuit does not immunise you from prosecution.”
Ceglia could face up to 40 years in prison if convicted.
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