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U.S. Arrests Paul Ceglia for Multi-Billion Dollar Scheme to Defraud Facebook
- weareyourfek 14y agowomp womp. what an assclown. also, the people who bought into ceglia should be arrested on the basis of also being assclowns, though the gullible type.
- weareyourfek 14y agowomp womp. what an assclown. also, the people who bought into ceglia should be arrested on the basis of also being assclowns, though the gullible type.
- fleitz 14y agoMail fraud... looks like some AG spent too much time watching "The Firm"
- mtgx 14y agoThey can arrest people whenever they want with "loopholes" like these, and yet they can't seem to do a damn thing about any of the bankers who helped bring down the economy. Yeah, I just don't buy that.
- deleted 14y ago[deleted]
- alexqgb 14y agoElliot Spitzer - who knows all about books been suddenly thrown in cases that routinely go unpunished - has some choice words about this in "Inside Job". Having been on both sides of the table, he is entirely credible when saying that the dearth of prosecutions reflected a lack of will, not an absence of ways. http://www.youtube.com/watch?v=FzrBurlJUNk http://www.youtube.com/watch?v=FzrBurlJUNk
- akgerber 14y agoThe same Preet Bharara did just come out with a suit against Bank Of America: http://www.businessinsider.com/bank-of-americas-hustle-program-2012-10 http://www.businessinsider.com/bank-of-americas-hustle-progr... Not that more oughtn't be done.
- smsm42 14y agoWell, not whenever they want. If you didn't send fraudulent documents by mail and they wanted to arrest you, they'd have hard time charging you with mail fraud, not? As for bringing down the economy, if you're going to arrest everybody that participated, you'd need a lot more jails. You'd have to arrest all that took and signed liar's loans, all that took interest-only 40 year loans with no income source to speak of, all that used their HELOCs as ATMs and took luxurious vacations on borrowed cash, all that saw their house double in value in 3 years and decided they are real estate moguls now, etc. etc. Bankers are a fashionable target, but they were not alone in this.
- leoh 14y agoDid this line strike anyone else as pathetic? In today’s press release, USPIS Inspector-in-Charge Randall C. Till added: “When Mr. Ceglia allegedly decided to take advantage of Mark Zuckerberg and Facebook, he underestimated the resolve of the Postal Inspection Service to bring him to justice for illegal use of the U.S. Mail.” Ceglia is probably in the wrong and unethical. But the self-righteousness and pompadour of the USPS? Really?
- willholloway 14y agoGod's mercy on anyone making dubious use of the US Postal Service. An attack on the purity of the mail is an attack on us all and will be prosecuted with deliberate severity.
- deleted 14y ago[deleted]
- jallmann 14y agoThe Postal Inspection Service is a useful tool. Mail fraud brings down a lot of sleazeballs that would otherwise have gotten away. Maybe because that's the last thing they would think to cover up.
- koenigdavidmj 14y agoYou make it sound like one of those grab-bag offenses like resisting arrest that effectively amount to `you pissed off the government and now we're going to punish you for it'.
- tptacek 14y agoHe may have made it sound like that, but it is not. It's a federal felony, and it's generally used to foreclose on large-scale scam operations.
- danielweber 14y agoExcept "resisting arrest" is your word against an officer's, while "mail fraud" (from what I understand, IANAL) still requires the state to meet the burden of proof.
- kfury 14y agoI'm disappointed by all the folks calling mail fraud a 'loophole'. Mail and wire fraud are the ways people prosecute domestic 419 (Nigerian prince) scams and other confidence games. This case shouldn't be given a free pass just because the party intended to be deceived is the judicial system rather than the mail recipient.
- shasta 14y agoLegality of fraud should have nothing to do with whether the mail was used.
- tptacek 14y agoIt doesn't, really. The only difference is the venue where it's prosecuted.
- rdl 14y agoIt does influence whether there's federal jurisdiction.
- yew 14y agoThe idea behind treating mail fraud separately is explicitly that the severity, if not the legality, of fraud should depend on whether or not the mail was involved. Remember that when mail fraud came into existence as a discrete crime the mail was the primary means of communication for essentially everyone and everything. Tampering with it went beyond deceiving any one person or group of people.
- nostromo 14y agoI was struck when we incorporated our company and raised financing how much we still use ink and paper to keep track of things like corporate ownership. When signing so many documents I wanted to seal them with paraffin wax and send them to our lawyers via carrier pigeon. In the case of Facebook, a multi-billion dollar company, it seems amazing that someone can come out of the woodwork and with a little effort in document tampering cause such a hullabaloo. It seems like too important of an issue to be inpart determined by "spacing, columns, and margins of page one of the Alleged Contract." Of course, I don't know of a better system, just that the current system seems archaic. (You probably couldn't create a centralized "contract bureau" in the federal government, because many contracts are private, until someone sues.)
- joezydeco 14y agoI always wondered if there was a need for a cheaper, worldwide document certification system. Of course you can get a notary to stamp a document or file it with the county clerk in your jurisdiction. But what about taking an MD5 of a PDF and printing it in the newspaper? Would that work?
- imglorp 14y agohttp://www.echosign.com/ http://www.echosign.com/ http://www.docusign.com/ http://www.docusign.com/
- SonOfLilit 14y agoSimpler: include in the contract a clause that says "the version of this text that counts is in a PDF with SHA1 23afb87c...". You still need a way to prove that the other side really signed the document you hold, and willingly. Notaries work. But this system is not forced - so it protects the side holding a real contract form the other side denying they signed, but does not protect you from a fraud turning up with a contract that you didn't really sign and claiming that you did, you just didn't bother to go to a notary with him. If there were a way to publicly claim "from now on, only contracts signed by my private key count as really signed by me... But it's not easy to implement such a measure. Every one you sign contracts with needs a really easy way to check if you declared this in the past, otherwise you can fraud them by signing a contract only with a pen. And they need to be aware of this new law.
- grellas 14y agoA few thoughts: 1. When Ceglia first filed his claims, I called it a "lawsuit full of holes [that was] built up by sensationalist reporting into a supposed major threat to Facebook and to Mr. Zuckerberg" and concluded that, "in the courts, this thing is going nowhere." (http://news.ycombinator.com/item?id=1537158 http://news.ycombinator.com/item?id=1537158) My sense of this had nothing to do with any fraudulent tampering with evidence as alleged now in the criminal prosecution but instead with the whole smell of the thing: a flaky 2-page contract with basically incoherent terms used as a basis for a lawsuit brought by a backwater lawyer who drafted a complaint that would have been an embarrassment to a first-year law student. It looked like a joke on the face of it, notwithstanding that a small-town judge had initially entered a TRO based on the filing. 2. Then, in April, 2011, this case looked like it had taken a major turn: Ceglia had dumped his original lawyer and retained the prestigious firm of DLA Piper; he also produced a mountain of emails "documenting" that he and Mr. Zuckerberg had, in effect, entered into a legal partnership giving him a major ownership piece in the FB venture; he also (via the lawyers) put together a compelling story in his complaint making it appear that FB and Mr. Zuckerberg were in deep legal trouble concerning his claims. (Here is my comment at the time: http://news.ycombinator.com/item?id=2438063 http://news.ycombinator.com/item?id=2438063) Once again, there was a sensationalist wave of reporting across the web rejoicing about how Mark Zuckerberg was about to get his comeuppance. 3. Since that time, through the work of very able lawyers for Facebook, the Ceglia case has been progressively torn to shreds in the federal court to which it had been removed and, as the case has disintegrated, it has drawn progressively less interest (the DLA firm withdrew at the first sign of serious trouble). Indeed, without the dramatic turn of a federal criminal indictment, I doubt that it would done more than draw a few yawns as it eventually headed to the judicial graveyard where most flaky cases ultimately find their rest. 4. The lesson here is how prejudice and crowd-think can dramatically affect and distort perceptions. When someone takes on the role of villain (as Mr. Zuckerberg has in some circles), there are those who so desperately want to see him torn down that they will suspend their better judgment just to see it happen, whether he was right or wrong in what he had done. This is not to excuse him in things he may have done wrong in other contexts, but he had done nothing wrong here and it is just amazing to me how many people were willing to take it as a given that he had even with little or no evidence to back it up. 5. The other (major) lesson here is that there are serious limits to playing fast and loose with the courts. It is true that there is much abusive litigation but there is obviously a line that cannot be crossed without inviting horrific consequences. It doesn't happen often enough that abusive litigants get what they deserve but, when it does occasionally happen, it is very nice to see. At least it sets an outer bound on what people can do to abuse one another in the courts.
- defen 14y agoPerhaps a stupid question, but if this guy had hand-delivered all the documents to the court, he'd be totally in the clear with regard to criminal activity? Why isn't he being charged with providing fabricated evidence to a federal court?
- tptacek 14y agoPresumably because it was easier for the DoJ to make the same case using mail fraud as the vector, just like it was easier to take out Capone with tax fraud. The heart of the actual case will still be the deceptions Ceglia used to attempt to scam a billion dollars out of Facebook.
- smsm42 14y agoThey probably could charge him with a number of offenses, from lying to a federal official to fabricating evidence, and some perjury might probably be involved too. But prosecuting each thing costs money, and more complex and burdensome the case is, more money it would cost - with the same result of getting the guy inside. So if they can get what they want cheaper (saving taxpayer money, court time, etc.) - I say why not? If he hand-delivered everything, I guess they probably would have to choose some other offense or maybe would just let it go if it'd be too hard to prosecute.
- timpeterson 14y agoBut Zuckerberg did meet with this Ceglia guy, right?
- kennethcwilbur 14y agoIf only tl;dr were in Latin, lawyers would understand it
- dschleef 14y agonimius illectus - "the excessive amount that is unread"
- unreal37 14y agoI wonder what will happen to his lawyers. And I wonder what the judge thinks. Ceglia has had a couple of lawyers (Argentieri and Boland) who have been filing discovery motions, and really aggressively going after Facebook and Zuckerberg. If you read only a couple of their filings, it seems really personal for them. They are absolutely offended at Facebook's lawyers behavior, really aggressive in the wording of their filings, and going so far as to call out FB lawyers by name and complain about them. And now it turns out the US Govt found the real contract from email archives and it doesn't match at all. I'd like to see the lawyers punished somehow (reprimanded) for pushing this obvious fraud through the court system so hard and for so long. And if I were the judge, wasting 2 years of his life on a sham case like this, I'd be furious. They were still submitting filings even as of yesterday!
- seivan 14y agoIs it me, or does it seem like his combined stupidity and incompetence (two different things) is what caused him to not realise the shit he pulled of leaves a trace? Take it from a non developer scumbag thief "wannatrepenur" to not have the God damn decency to read up on how email works before trying a stunt like this.
- redthrowaway 14y agoCan anyone give a reasonable argument for why mail fraud carries a maximum sentence of 20 years? That seems ludicrous in the extreme. Why does mail fraud incur a greater penalty than rape, kidnapping, and most forms of murder?
- Tipzntrix 14y agoIANAL, but don't those have a maximum of life (25 years)? To threaten defendants, they also stack each single charge one on top of each other to make 5 cases look like a maximum of 125 years too.
- rmah 14y agoMaybe compared to what Europe sentences murderers. But in NY State, 2nd degree murder is 25 to life and 1st degree is life.
- tptacek 14y agoBecause mail fraud cases address a very large spectrum of actual crimes. The typical sentence for a mail fraud case is 21 months; there exists a very large number of aggravating factors that increase mail fraud sentences, including the scale of the operation (if you mass-mail to perpetrate fraud, you'll do more time), the sophistication of the victims (if you try to defraud fixed-income seniors, you'll do more time), sophisticated attempts to conceal your activities to avoid investigators, if you react to investigation by trying to move your whole operation out of US jurisdiction, if you damage the solvency of a bank, things like that. People fixate on the maximum sentences when they should focus instead on the minimums (here, 10 months). Just by nature of what "mail fraud" investigations represent, you're bound to get wild swings from case to case.
- seacond 14y agoMaybe they fixate on maximums because those are what are used plea bargaining? Would you leave the possibility of 20 years in a federal prison (no matter how remote) to chance?
- taylorbuley 14y agoI had dug up his arrest record ~day one -- Not pretty. Interestingly, I had surprised a previous lawyer, who apparently did not do the same before taking on the case. http://www.forbes.com/sites/velocity/2010/07/28/facebooks-magic-mushroom-ride/ http://www.forbes.com/sites/velocity/2010/07/28/facebooks-ma...