Photo: Jaime Hogge
Bloomberg/Getty Images
Fraud
DAVID MALAMED
How to Dodge a Court Clash
“I’d like to know if the money freed up to retain counsel … he may be using in connection with his flight.” The marshals had raided Ceglia’s home in Wellsville, in
upstate New York about a two-hour drive south of Canada, aſter a pretrial services officer was unable to contact Ceglia by phone, text or email, according to Bloomberg News. The accused fraudster was due in a Manhattan court on May 4 to begin his trial on charges that he fabricated documents to make it appear Facebook founder Mark Zuckerberg had agreed to pay Ceglia 50% of the social media company, plus an addi- tional 1% interest in the business per day aſter January 1, 2004, until the website was completed, in return for a US$1,000 fee negotiated between the men in April 2003. If paid in full, Ceglia (who also claimed damages) would end up owning 84% of Facebook. Following an investigation by the US Postal Inspection
I
N EARLY MARCH, THE STORY OF PAUL CEGLIA, who was facing serious fraud charges in relation to his claim that he owns half of Facebook Inc., took a bizarre twist.
Ceglia, his wife, Iasia, their two children (ages 10 and 11) and
Buddy, the family dog, disappeared aſter the 41-year-old appar- ently cut off the ankle bracelet he had been ordered to wear as part of a US$250,000 bail agreement negotiated in 2012. US marshals, armed with a search warrant, discovered the tracking device, which was motorized and mounted on a ceiling, attached to a homemade contraption that simulated the move- ments of a person walking around. In court papers filed following Ceglia’s disappearance,
Assistant US Attorney Alexander Wilson said, “The purpose of the contraption appeared to be to keep the bracelet in motion using a stick connected to a motor that would rotate or swing the bracelet.” A timer was connected to the bracelet’s charger so monitors would think Ceglia was at home charging it, Wilson added. In revoking Ceglia’s bail, which his family will likely have to
pay, Manhattan Federal Court Judge Vernon Broderick noted that “it’s not easy to tamper with an ankle bracelet — it’s some- thing that took a fair amount of planning.” The judge also wondered if Ceglia had masterminded a way
to fund his disappearance. Broderick noted that Ceglia’s bail had been amended in September, allowing him to hire lawyers.
60 | CPA MAGAZINE | JUNE/JULY 2015
Service into Ceglia’s claims, he was charged with mail fraud and wire fraud, which carried a possible sentence of up to 40 years in prison. He pleaded not guilty. At the time of this writing, Ceglia had not been located. A
prevalent theory was that Ceglia had taken his family to Ireland, his mother’s birthplace and where he had once lived. Another conjecture had him in the Bahamas, where he had worked for several years. Although Ceglia had to surrender his passport as a bail con-
dition in 2012, Iasia’s family, who think she was coerced into fleeing with her husband, believe he could have obtained a new one. They called him “a master manipulator.” The backstory of Ceglia’s master plan to extort an incredible amount of money from Facebook — in early 2015 it had a market capitalization of more than US$200 billion, according to Yahoo Finance — might tempt film director Aaron Sorkin to consider making a sequel to The Social Network, his highly suc- cessful film about the creation of Facebook. The villain, of course, would be Ceglia, who has what is oſten
referred to as a checkered past. “In 1997, he pleaded guilty to possession of hallucinogenic mushrooms in Texas, and [in 2010], he was arrested, charged with fraud and had his business shut down by Andrew Cuomo, then the New York State attorney general,” the New York Times reported. The latter case con- cerned Allegany Pellets, a company founded in 2009 by the Ceglias, which made and sold pellets as environmentally friendly heating fuel. “Eight months later, Mr. Ceglia was arrested by the state police and accused of defrauding
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