by David Malamed
In 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 after the 41-year-old apparently 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 movements 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 something 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. “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, after a pretrial services officer was unable to contact Ceglia by phone, text or email, according to Bloomberg News. The accused fraudster was due in 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 additional 1% interest in the business per day after 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 Service into Ceglia’s claims, he was charged with mail fraud and wire fraud, which carried a possible sentence of up to 40 year in prison. He pleaded not guilty. Read more…
This article is reprinted from the June/July 2015 CPA Magazine with permission from the Chartered Professional Accountants of Canada, Toronto, Canada.
Any changes to the original material are the sole responsibility of the publisher and have not been reviewed or endorsed by the Chartered Professional Accountants of Canada.