Paul Ceglia exits federal court in New York on Nov. 28, 2012 Photo: Peter Foley/Bloomberg

After a decade of disappointments—to put it mildly—Paul Ceglia got some good news last week in his failed bid to wrest billions of dollars from Facebook.

Good news in Ceglia's case is relative, however.

Ecuadorian President Lenin Moreno refused a U.S. request to extradite the Buffalo-area businessman back to New York for a criminal trial. But Ceglia, who went from heavily lawyered plaintiff to criminal defendant to international fugitive after first suing Facebook in 2010, is still stuck in Ecuador indefinitely, with his legal exposure and debts at home mounting day by day.

A refresher: Ceglia won headlines and won over a series of major law firms—including DLA Piper and Kasowitz Benson Torres—with his claim that a 2003 agreement with Facebook founder Mark Zuckerberg entitled him to a majority stake in the social media behemoth.

Facebook's lawyers at Gibson, Dunn & Crutcher, however, methodically dismantled the case and eventually convinced a federal judge that the purported contract was a fake. Not only was the ownership case thrown out in 2012, but Gibson Dunn's evidence helped persuade federal prosecutors in New York to indict Ceglia for fraud. Facebook, not satisfied with the legal beat-down Ceglia's lawyers had endured from Gibson Dunn's Orin Snyder, went on to sue DLA Piper, Milberg and Lippes Mathias Wexler Friedman for pursuing Ceglia's case to begin with. (That action was dismissed in 2015.)

Then the Ceglia case turned into an international thriller. In March 2015 he cut off his ankle monitor, attached it to a motorized device mounted on his ceiling to imitate movement, and disappeared with his wife, two young children and dog. The family stayed hidden from U.S. authorities until he was finally discovered and arrested in Quito, Ecuador's capital, in August 2018.

Robert Fogg, Ceglia's Buffalo-based criminal defense lawyer, said he believes Ceglia first went to Florida when he went on the run. “They were pretending to be Amish,” Fogg said. “They were trying to get on a boat out of here.”

Since his exodus, several properties belonging to Ceglia's family have been auctioned off. Fogg said that Ceglia has made good on all financial obligations to him up to this point.

Fogg said that he believes Ceglia, and his family, had been in Ecuador for at least two years when U.S. authorities followed a friend of Ceglia's wife when she went to visit them there, finally ending the mystery. 

An Ecuadorian judge initially granted the U.S. extradition request, and that decision was held up on appeal. But then Moreno stepped in and overturned the decision. The move came just weeks after Moreno ended the asylum for Wikileaks founder Julian Assange, who had been staying in the Ecuadorian embassy in London for seven years.

“From now on we'll be more careful in giving asylum to people who are really worth it, and not miserable hackers whose only goal is to destabilize governments,” Moreno said in a speech explaining that decision.

Apparently Ceglia was worth it. Fogg commented that he believed the decision was less about Ceglia and more about Moreno showing frustration over what he described as an “inequitable” extradition dynamic between the U.S. and Ecuador. Ecuador, for example, has been requesting the extradition of two bankers, William Isaias and his brother Roberto Isaias, since 2012. The U.S. authorities arrested both men in February, but released them.

Fogg said he genuinely believes his client was railroaded by the criminal charges and said that he believed the close relationship between Facebook, Gibson Dunn and prosecutors in the Southern District of New York paved the way for the indictment. He cited Preet Bharara, the U.S. attorney for the Southern District of New York at the time, who started his legal career in 1993 at Gibson Dunn, as an example.

Fogg said that the criminal prosecution was intended to derail his client's initial civil case against Facebook and Zuckerberg. “The criminal case hampered my client's ability to investigate, to build his case,” Fogg said.

Gibson Dunn's Snyder declined to comment on Fogg's claims or Ceglia's status.

Fogg said that after the various “miscarries of justice” that Ceglia was forced to endure, he understands why he fled.

He said he was confident Ceglia's pending request for asylum in Ecuador will be upheld, as Ceglia and his wife have a child who was born in the country that could bolster their claim. At some point, he said, the criminal case against him will be dismissed, as he said there was no chance Ceglia was returning to the U.S.

“After a while it sort of becomes ridiculous,” he said. “Even if you can find him, you can't 'get' him. It's only there to harass him,” Fogg said of the current state of the charges.

And after four years on the run, Fogg thinks that Ceglia and his family can finally relax.

“Paul can live his life down there. His kids can stretch their legs and go to school,” he said.

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