Would you pay $1,000 for a 50 percent stake in Facebook?
If you live in a cave, or the year happened to be 2003, perhaps not.
But a gentleman by the name of Paul Ceglia, who allegedly once paid Facebook founder Mark Zuckerberg $1,000 for help with a website, said yes and helped get the project off the ground.
According to a lawsuit reported on by The New York Times, Ceglia is now suing for a 50 percent share of the popular social networking site, now worth billions.
Ceglia is a wood-pallet salesman from upstate New York, according to the article, and, aside from paying Zuckerberg for web work, he also gave him $1,000 for a stake in Facebook. [Read the alleged contract]
Ceglia has filed an amended complaint April 11 in federal court in New York that include excerpts from e-mails with Zuckerberg and that, if authentic, could make him very, very rich. [Read the amended complaint]
Facebook has called the lawsuit a fraud.
“This man is a convicted felon with a history of fraud charges,” says Facebook attorney Orin Snyder in the Times article. “His revised complaint is simply his latest scam — supported by a doctored contract and fake e-mails.”
But Ceglia’s lawyers, which includes the former attorney general of New York, say otherwise.
“Anyone who claims this case is fraudulent and brought by a scam artist will come to regret those claims,” Ceglia attorney Robert W. Brownlie told the Times.
After that, Ceglia allegedly paid Zuckerberg $1,000 for a 50 percent stake in Facebook.
The lawsuit, amended April 11, says “Zuckerberg told Ceglia if Ceglia hired him to work on the StreetFax.com project and helped fund the development of his other project, Zuckerberg would give Ceglia a one-half interest in Zuckerberg’s other project.” The “other project” was described by Zuckerberg as “an on-line, interactive yearbook,” according to the suit. (see screengrab of lawsuit below)
At one point in the e-mail transactions between the two, Zuckerberg is alleged to make a plea to Ceglia for him to rescind a clause that gives Ceglia 1 percent more of the company for every day the project is late.
“I’d like to suggest that you drop the penalty completely and that we officially return to 50/50 ownership,” Mr. Zuckerberg is shown as writing in the lawsuit. Zuckerberg threatens to not “putting the site live” if Ceglia demands more than 50 percent.
In 2004, Zuckerberg is alleged to have told Ceglia repeatedly via email that Facebook was not a moneymaker.
No matter what happens, Zuckerberg will be a billionaire. Facebook is so popular it has Google concerned.
But if Ceglia is right, even partially, I predict he won’t be selling wood pallets for long.
In another suit, two former Harvard University classmates of Zuckerberg asked a federal appeals court Monday to reconsider its order that they accept a $20 million cash and stock settlement over the website’s creation.