Family of alleged Facebook fraud fugitive to forfeit bail: U.S. judge

By Nate Raymond
Fugitive Paul Ceglia is shown in this U.S. Marshals photo released on March 10, 2015. REUTERS/U.S. Dept. of Justice/Handout

By Nate Raymond

NEW YORK (Reuters) - The family of a New York man who became a fugitive after being criminally charged with trying to defraud Facebook Inc founder Mark Zuckerberg out of half of the social media company was ordered on Tuesday to forfeit his bail.

U.S. District Judge Vernon Broderick in Manhattan entered a $250,000 judgment against Paul Ceglia's parents and brother after previously revoking his bail.

Broderick said he might reduce the penalty if the family helps locate Ceglia, who disappeared more than two weeks ago. A prosecutor said Ceglia could face new fraud and bail jumping charges soon.

Ceglia's father Carmine said he did not know where his son was but expressed sympathy for him, suggesting that Facebook's principal lawyer was unduly influencing federal prosecutors.

"I think he was afraid for his life that he wasn't going to get a fair shot," Carmine Ceglia said.

Facebook's lawyer had no immediate comment.

Paul Ceglia, 41, has been wanted since March 8 after his ankle bracelet was found removed at his Wellsville, New York, residence. The U.S. Marshals Service said Ceglia is believed to be traveling with his wife, two children and his dog.

Ceglia had been set to face trial May 4. He was first charged in 2012 for forging documents to extort Zuckerberg out of a 50 percent stake in Facebook, whose market value on Tuesday was more than $236 billion.

The case stemmed from a 2010 lawsuit Ceglia filed against Facebook and Zuckerberg in Buffalo, New York, contending that Zuckerberg signed a contract while attending Harvard University giving Ceglia half of a planned social networking website.

A federal judge last year dismissed Ceglia's lawsuit, finding the contract was doctored.

Ceglia is appealing, but a federal appeals court last week threatened to dismiss the case because of his fugitive status.

At Tuesday's hearing, federal prosecutor Janis Echenberg said Ceglia may soon be charged with defrauding investors in the civil lawsuit out of $650,000, and also jumping bail.

Gil Messina, a lawyer for Ceglia, said after the hearing that he and other lawyers were served on Monday with grand jury subpoenas that appeared connected to these new charges.

The case is U.S. v. Ceglia, U.S. District Court, Southern District of New York, No. 12-cr-00876.

(Reporting by Nate Raymond in New York; Editing by Tom Brown)