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NY Facebook plaintiff seeks halt to criminal case

Carolyn Thompson, Associated Press

BUFFALO, N.Y. (AP) -- A lawyer for a New York man who was charged with fraud after filing a multibillion-dollar lawsuit claiming half ownership of Facebook asked a judge Friday to suspend the criminal case to keep it from interfering with the still-pending lawsuit.

Plaintiff Paul Ceglia meanwhile said he believes Facebook Inc. and founder Mark Zuckerberg are behind the federal government's decision to bring the criminal charges against him as a way to undermine his ownership claim.

"They've been pulling every dirty trick out of the bag," said Ceglia, of Wellsville, who showed off the ankle monitor he must wear while awaiting trial on mail and wire fraud charges filed by the U.S. Attorney's Office in New York City.

Speaking to reporters after a hearing on the request to halt the criminal case, Ceglia accused the government of granting more favorable treatment to "the richest 1 percent" and suggested federal prosecutors were working in tandem with Zuckerberg, who has been supportive of President Barack Obama. U.S. Attorney Preet Bharara, an Obama nominee, used to work for the law firm representing Facebook, Ceglia said.

"It's almost as if the government is doing the work of Mr. Zuckerberg," Ceglia's attorney, Joseph Alioto, said.

Both Facebook and federal prosecutors declined to respond.

The government has accused Ceglia of doctoring a software development contract he signed with Zuckerberg in 2003 to make it appear Ceglia would receive half ownership in Facebook in exchange for $1,000 in startup money for the budding company.

That contract, which Ceglia insists is authentic, forms the basis of his 2010 civil suit.

Alioto argued the criminal prosecution in New York City is hindering resolution of the civil case in Buffalo because prosecutors have said they'll view any new filings or correspondence as contributing to a criminal scheme to defraud. Alioto wants the civil lawsuit to go to trial.

"We are stymied because of this threat," Alioto told U.S. District Judge Richard Arcara in asking for a preliminary injunction.

He said prosecuting Ceglia criminally for filing a civil lawsuit violates his constitutional rights.

"The First Amendment does not protect fraud. The First Amendment does not protect fabricated documents," responded Assistant U.S. Attorney Mary Pat Fleming, adding that Ceglia's alleged fraud began before he sued.

Fleming said it is unheard-of for a judge to be asked to step in and halt a criminal prosecution and urged Arcara to stay out of it.

"It's difficult to respond to because it's absurd," she said.

Arcara reserved decision.

Also pending before Arcara is whether to accept a magistrate judge's March recommendation to dismiss Ceglia's civil lawsuit. The magistrate, after numerous hearings and thousands of pages of court filings, sided with Facebook in agreeing the contract was faked. Ceglia has until Wednesday to respond to the dismissal recommendation.