The IDF's Twitter banner. (Screengrab)

In what is surely a weird moment for Twitter, bastion of cat-fights between tech bloggers and hashtag memes entirely devoted to stupid crap people do when they drink, Israel's Defense Forces today announced a major operation against Hamas. As Fast Company noted, this "was the first confirmation made to the media of an official military campaign" via Twitter.

The IDF's announcement is serious business. The tweets speak for themselves:

The IDF has embarked on Operation Pillar of Defense.

— IDF (@IDFSpokesperson) November 14, 2012

All options are on the table. If necessary, the IDF is ready to initiate a ground operation in Gaza.

— IDF (@IDFSpokesperson) November 14, 2012

The IDF has embarked on an operation against Hamas, an Iranian proxy responsible for terror attacks on Israel. #Iran #Gaza

— IDF (@IDFSpokesperson) November 14, 2012

Earlier Wednesday the IDF tweeted that it had struck it's "first target," Hamas military leader Ahmed Al-Jabari.

Hamas confirmed Al-Jabari's death and according to the Telegraph, said the official's death had "opened the gates of hell."

At 1 p.m. ET on Wednesday, Hamas was a top-trending topic on Twitter in the United States, just behind "Marlins."

Bank of America, one of the victims of Operation Ababil (Screengrab)

The Izz ad-Din al-Qassam Cyber Fighters published a new message on their Pastebin profile late Monday, warning of a new round of cyber attacks against U.S. financial institutions, beginning this week.

In their lengthy post, titled "Phase 2 Operation Ababil," the Qassam Cyber Fighters announced that they plan to attack websites owned by J.P. Morgan Chase, Bank of America, U.S. Bancorp, PNC Financial Services and SunTrust Banks.

Previous cyber attacks for which the ideologically-motivated group claimed credit took some bank sites down for more than 24 hours and affected website functions for days afterwards. The Cyber Fighters say that in Phase 2, "the wideness and the number of attacks will increase explicitly; and offenders and subsequently their governmental supporters will not be able to imagine and forecast the widespread and greatness of these attacks."

U.S. officials have said they believe the attacks are state-sponsored by Iran, but the cyber attackers still insist they are not working for any government. Though they mention events since their previous attacks such as Israel's efforts against Hamas, the al-Qassam Cyber Fighters still say their main reason for renewed cyber attacks is the presence of Innocence of Muslims on the Internet. Google has refused to removed the anti-Islamic video from the Internet in nations where it is not against the law.

Fox Business notes one of the reasons security researchers and U.S. officials have said they believe the al-Qassam Cyber Fighters are more organized and well-funded than an ad-hoc group of cyber terrorists is because they use such a sophisticated botnet of compromised web servers. The Cyber Fighters' zombie army of bots sidesteps bandwidth limits and focuses more power against their targets than attacks from home computers.

Previous banks affected by al-Qassam's efforts included Wells Fargo, Bank of America and the New York Stock Exchange.

Update: It looks like the Cyber Fighters didn't waste any time. As of 1:45 p.m. ET Tuesday, many Bank of America customers were reporting problems accessing the bank's website.

screengrab

Israel and Hamas may have agreed to cease hostilities on "land sea and air" but that may not stop the cyberwar. On Wednesday the ZCompany Hacking Crew (ZHC) hacked apart the online life of Israel's Vice Prime Minister, Silvan Shalom. ZHC took over Mr. Shalom's Facebook, Twitter account, his blog--just about everything. ZHC tweeted that their control was almost total:

ZHC will be publishing Zine including details of #SilvanShalom contacts,screenshots. docs tomorrow. Watchout #OpIsrael #Gaza #FreePalestine

— ZCompanyHackingCrew (@Z_H_C_) November 21, 2012

In a Pastebin post, ZHC attempted to clarify a few things about who they are, writing, "We are not part of Anonymous although we support OpIsrael."

The crew also posted multiple screengrabs of what appear to be the vice p.m.'s Gmail account as well as his defaced social media pages.

Anonymous issued a statement Wednesday afternoon in which they indicated the agreement between Israel and Hamas had prompted them to "stand down immediately from all further cyber attacks upon the IDF or Israel so as not to risk this delicate and perilous cease fire arrangement."

Anonymous stated that they also encouraged "all those cyber groups who have joined with us to also cease and desist now from aggressive acts, and give this cease-fire a chance."

Hacktivists like ZHC may continue their activities in spite of Anonymous's request. As they stated in their release of some of Vice Prime Minister Shalom's data, "Our Recent Hacking of social media profiles of Israel's VPM Mr Silvan Shalom was motivated by his recent statement in which he threatened to blow up Gaza. Gaza is not just in Palestine we are all Gaza."

Bank of Jerusalem site before its database was deleted. (Google cache)

As part of Anonymous's #OpIsrael, it appears the hacktivists have wiped the Bank of Jerusalem from the web. The site currently loads a mostly blank page with the message, "Couldn't connect to the database server." A tweet appearing to tie the site outage to Anonymous's support of the people of the Gaza was posted on @YourAnonNews:

Bank of Jerusalem database has been deleted | bankjerusalem.co.il| #OpIsrael #Anonymous

— Anonymous (@YourAnonNews) November 16, 2012

Anonymous quickly mounted OpIsrael after the Israel Defense Force tweeted a declaration beginning of Operation Pillar of Defense, an offensive targeting Hamas. Israel calls Hamas an "Iranian proxy for terror attacks" against them.

Most of the top-trending pastes on Pastebin are related to OpIsrael, including this message, which says in part:

Anonymous does not support violence by the IDF or by Palestinian Resistance/Hamas. Our concern is the for the children of Israel and Palestinian Territories and the rights of the people in Gaza to maintain open lines of communication with the outside world.

In a new statement released Friday evening, Anonymous defended its actions by repeating that it did not support violence and insisting "Anonymous has not used any anti-Semitic language during our campaign. Nor have we vocalized any support for Palestinian military operations or resistance groups. Our goal was to protect the rights of Palestinian people who are threatened with silence as Israel has made attempts to shut down cell phone and internet service throughout Gaza."

The Bank of Jerusalem is Israel's seventh largest financial institution and is listed among Dun & Bradstreet Israel's 100 Largest Enterprises. In addition to taking the Bank's site offline, Anonymous has also struck Tel-Aviv's city page an Israeli government commerce site and Israel's Ministry of Foreign Affairs, just to name a few.

(Screencap: Twitter)

After announcing their intention to attack Hamas on Twitter, the Israeli Defense Force began military operations in Gaza yesterday. The Alqassam Brigades, Hamas’s military arm, also has a Twitter account, and the two have been engaging in a sparring match on the platform that elevates typically meaningless Twitter tiffs into the stuff of WWIII nightmares.

Aside from updating their followers on the death toll and the status of military strikes, both accounts have tweeted photos of children (warning: both links are graphic) injured or killed in the conflict. The IDF is letting no social media channel go untouched. They've been uploading photos of their operations to Flickr and Pinterest and publishing status updates to their official Facebook page. They also just started a Tumblr account that is littered with pro-Israel propaganda, including a photo showing a cartoon of an Israeli family in the crosshairs of a Hamas target with the message "Israeli civilians are Hamas's target."

Spreading information and even propaganda through social media channels in times of violent conflict is new territory for internet companies. The Arab Spring is often cited as Twitter's defining moment. In that case, Middle Eastern citizens used the service to communicate with each other and the press in order to foment revolution against totalitarian governments.

But this time, it’s different. As Peter Kafka of AllThingsD noted, Israel is, in essence, "using the Internet as weapon," employing the same tactics as dissidents in the Arab Spring to spread a message without a middleman. There is something grotesque and disturbing about two parties with a long history of conflict live-narrating the launching of bombs that kill civilians and destroy communities. There is no empowerment or revolution here: just a dark, sinking feeling as we watch the bloodshed unfold in real time.

And the platforms that are allowing both the IDF and Alqassam Brigades to spread their messages? Faced with a new frontier of social media manipulation, neither YouTube or Twitter really knows what to do.

(Screencap: Tumblr)

It's difficult to nail down whether or not the content disseminated by both the Hamas and IDF accounts violates Twitter's terms of service. One Twitter rule explicitly bans the “direct, specific threats of violence against others," which certain IDF tweets do seem to violate. The Daily Dot reports that the IDF Spokesperson Twitter account was temporarily suspended for about 40 minutes today, but was then reinstated. As Twitter doesn't comment on the status of individual accounts, it's difficult to suss out what the reasoning behind this was; perhaps it was automatically suspended after being flagged for removal by users. Whatever the case, it's back up now, tweeting about the rockets flying between Tel Aviv and Gaza. (A fake account, @IDFSpokesman, has been suspended.)

YouTube, meanwhile, also temporarily banned a video uploaded by the IDF that shows a "pinpoint strike" that killed Ahmed Jabari, one of Hamas's military leaders. The video was put back up after AllThingsD pointed it out. YouTube told them:

“With the massive volume of videos on our site, sometimes we make the wrong call. When it’s brought to our attention that a video has been removed mistakenly, we act quickly to reinstate it.”

As one social media analyst told the BBC, the actions of both the IDF and Alqassam Brigades on Twitter put the service in a difficult position. "They want to preserve their position as a carrier service that doesn't editorialize," he said. "On the other hand, they have terms and conditions that must be adhered to."

"This is not a decision a couple of hundred engineers in North California want to be making," he added.

And yet, as hashtagged insults and news of bombs continue to fly across these services, it's a decision social media platforms may have to make sooner or later.

(Screencap: Falcon-s.co.il)

Yesterday, the Israeli Defense Force announced on Twitter it would begin military operations on Hamas targets in the Gaza Strip. Though social media has long been used as a tool of dissent that can help foment revolution, declaring war on Twitter is a first, and it's a move that raises serious questions about war and propaganda in the age of the internet. Now Anonymous, the loose collective of hacktivists, has set its sights on the IDF, launching #OPIsrael in response to the country's decision to shut down internet service in Gaza.

According to a press release published to Anonpaste.me:

When the government of Israel publicly threatened to sever all Internet and other telecommunications into and out of Gaza they crossed a line in the sand. As the former dictator of Egypt Mubarack learned the hard way - we are ANONYMOUS and NO ONE shuts down the Internet on our watch. To the IDF and government of Israel we issue you this warning only once. Do NOT shut down the Internet into the "Occupied Territories", and cease and desist from your terror upon the innocent people of Palestine or you will know the full and unbridled wrath of Anonymous. And like all the other evil governments that have faced our rage, you will NOT survive it unscathed.

Anonymous has already begun defacing multiple pro-Israel websites, including Falcon-s.co.il and Advocate-israel.com. They've also compiled an Anonymous Gaza Care Package, which contains basic safety and surveillance avoidance information, as well as instructions for how to jigger an internet connection if Israel takes down Gaza's servers. Another document posted to Pastebin outlines how to connect to dial-up in the event of an internet outage.

A Google doc, also being circulated by Anonymous, provides information about protests across the globe in response to the IDF's military operations. A Facebook event for a protest at the New York Israeli Consulate on 42nd St. and 2nd Ave. already has over 1,000 people registered as attending.

Meanwhile, through its official Twitter account, the IDF continues its own attempts to win hearts and minds to the cause. "Good morning to our friends in #America," reads a recent tweet. "While you were sleeping, 3 Israelis were killed when a rocket hit their house." The spokesperson also retweeted a photo of a baby injured by a rocket attack in Israel.

Illustration by David Saracino.

PAUL CEGLIA IS A PUDGY 38-YEAR-OLD, with greasy black hair and creases around his light brown eyes, a serial small-time entrepreneur who could sell you the Brooklyn Bridge. “He’s got tremendous confidence,” said Bill Castle, an upstate hotelier and one of Mr. Ceglia’s many bilious former business partners. “Smiles all the time, got this award-winning smile. Even when under pressure, he continues to smile.”

Mr. Ceglia piqued the nation’s curiosity when he filed a lawsuit last year in the Supreme Court of New York’s Allegany County claiming 84 percent ownership of Facebook; he piqued Betabeat's when we read that he had been arrested for felony possession of magic mushrooms in Texas, claimed to have founded a natural burial cemetery in Ithaca and once operated an ice cream shop.

He also ran a video rental store, flipped real estate on eBay and owns a wood pellets company that was shut down by the Attorney General due to allegations of fraud. He’s currently working on a prototype of a “refrigerator/cookstove for use in developing nations,” he told the Wellsville Daily Reporter.

While none of his schemes have been especially lucrative so far, one failed venture may yet make him rich: StreetFax.com, a database of street photographs that Mr. Ceglia intended to license to insurance companies for use in evaluating claims, was built in part with code written by a young for-hire developer named Mark Zuckerberg. A 2003 contract with the programmer, now better known as the founder of Facebook, is the basis of Mr. Ceglia’s claim that he is entitled to half of the company.

Mr. Ceglia has so far been less of a nuisance for Facebook and its legal staff than the Winklevoss twins, Tyler and Cameron, whose claim that Mr. Zuckerberg stole the idea for Facebook from them during his Harvard days formed the basis for the Oscar-winning film The Social Network and netted them a settlement of $65 million.

Mr. Ceglia’s much simpler assertion is essentially that he helped to fund Mr. Zuckerberg’s work on Facebook in the early days of its development, and is therefore entitled to a share of  the company. Mr. Zuckerberg affirms he signed a contract concerning StreetFax after answering Mr. Ceglia’s Craigslist ad. But according to Mr. Ceglia, Mr. Zuckerberg also approached him seeking funding for another project he was working on: “The Facebook,” as the site was originally called. Mr. Ceglia says he gave Mr. Zuckerberg at least $1,000 for the project. (“He actually felt bad because Mark was making him so much money [on StreetFax],” a friend said.) According to Mr. Ceglia, the two men drew up a contract giving Mr. Ceglia half of “The Facebook,” and more if the project was not completed by January 1, 2004.

Mr. Ceglia’s filings with the court include a copy of a paper contract that refers to Facebook and excerpts from emails Mr. Ceglia claimed he’d saved by copying and pasting the text into Microsoft Word. In the purported emails, Mr. Zuckerberg and Mr. Ceglia renegotiated for an even 50-50 partnership before Mr. Zuckerberg called The Facebook a flop and said he wanted to refund Mr. Ceglia’s money. Mr. Ceglia claims he did not take the money back, electing to write off the affair as a loss.

Facebook says the contract and emails are forged. The company filed what it says is the authentic contract, which it found on Mr. Ceglia’s computer and on a computer at the law firm Sidley Austin. That contract only mentions StreetFax.

Mr. Ceglia has taken a thrashing in the media and run through three law firms, all of which declined to say why they’d dropped him as a client. But a year and more than 100 filings later, his case is still ongoing.

Orin Snyder, attorney for Mark Zuckerberg and Facebook, does not sound like someone looking to negotiate a settlement. “Irrefutable forensic evidence confirms that this case is a fraud,” he told Betabeat. “Ceglia continues to abuse the judicial process by refusing to comply with multiple court orders.  We will ask the court to dismiss this case and impose sanctions after Ceglia produces the emails and other evidence that he has been concealing.”

Meanwhile, Mr. Ceglia is already hatching plans for taking Facebook to the next level. “I’m starting to have all sorts of opinions as to what I’ll do when I’m at the helm,” he wrote in an email to Emil Protalinski of the tech blog ZDNet, one of a handful of press interviews he’s given in the past year (the others were to the Wellsville Daily Reporter and the Irish local paper The Connacht Sentinel). He also told reporters he’d be willing to hire Mr. Zuckerberg.

Elsewhere in the 1,147-word email, he wrote, “You won’t go public Mark, you won’t IPO, you won’t pass go. I won’t let you sell this company out from under me, not while I have the power to stop you.”

Mr. Ceglia is supposedly holed up somewhere in Galway, Ireland, where he says he and his family fled to escape harassment by Facebook’s investigators.

Through an attorney, Mr. Ceglia declined to speak with Betabeat, and many of his acquaintances refused to speak for attribution. The reasons given were that his hometown of Wellsville, New York, is “a small town,” or that that they feared retribution from Mr. Ceglia or his father, Carmine Ceglia, a local landlord. One source called Mr. Ceglia “dangerous.” A local realtor of Mr. Ceglia’s acquaintance abruptly hung up on Betabeat without explanation. He seemed distressed.

Others may have been reluctant to alienate a future billionaire who might be inclined to share the wealth.

“I love the town,” Mr. Ceglia told the Wellsville Daily Reporter in an email in August. “I plan to do a lot for Wellsville. At the top of my list right now is a Boys and Girls Club of America.”

Wellsville (pop. 8,200) is a rural town sitting eight miles from the Pennsylvania border. It was best known for two things before Paul Ceglia: the Great Wellsville Balloon Rally and the town’s patron John Rigas, who founded Adelphia Communications Corporation in 1952 and grew it into the fifth-largest cable company in the country—before it collapsed in 2002. Mr. Rigas later went to prison for bank, wire and securities fraud.

When Mr. Ceglia was in second grade, his family moved from Wellsville to his mother’s native Ireland for six years. His first homecoming was in the summer before high school, when he showed up unexpectedly at football camp. He ended up not joining the team; he was not athletic, a serious social detriment in Wellsville, classmates said. Instead he developed a reputation as an artsy delinquent who stayed out late, bar-hopping and hustling at pool with older friends. At one point, he ran a poker game out of one of his parents’ vacant rentals, making enough money to pay for concerts and hotel rooms for himself and his friends. He was always trying to get away with just a little bit more, his hometown peers said. In eleventh grade, Mr. Ceglia and his best friend at the time broke into a fruit stand somewhere between Portville and Olean. They were arrested when they tried to use the cash to rent a car.

In time, Mr. Ceglia’s crew gave itself a name: the Carcheones, an inspired fabrication that was more of a brand than the criminal gang some peers imagined it to be. The crew spent most nights playing cards in the garage or playing music out of parked cars and drinking beer. Soon, even the good kids were jostling to join up. But after the fruit stand heist, many parents told their kids to stay away from Paul Ceglia.

Mr. Ceglia embarked on a series of fortune-seeking expeditions, but always ended up back in Wellsville. After high school, he moved to an environmentalist artist colony in Taos, New Mexico, with a girlfriend, returning a few years later with Kristin Van Huysen, a massage therapist and landlord from Washington state. The pair operated a cluster of rental homes under a 501 c(3) corporation called the Wellsville Veterans Project. Ira Warboys, a high school classmate of Mr. Ceglia’s, rented one of the homes and did maintenance work for Ms. Van Huysen. She gave him the impression she and Mr. Ceglia were married.

“I remember they were living in one of the houses down on South Broad Street,” Mr. Warboys said, referring to a suburban side street of single family homes assessed at values between $20,000 and $40,000. “It was a wreck. Roof was fallen right in. They had a tent set up in the living room downstairs. They were living in a tent inside the house. The house didn’t have any power hooked up to it, any gas or anything. I remember it being in the paper that they were arrested in unlivable habitats.” They got caught because neighbors glimpsed them burning lanterns from the street, he said.

In 1995, Ms. Van Huysen won a $5,807 judgment against Mr. Ceglia for a real estate related case, the Buffalo News reported. Apparently they reconciled, because they were arrested together two years later in 1995 in Panola County, Texas, for felony possession of 400 grams of psilocybin mushrooms seized in a highway stop. “That’s a lot of dope,” said county prosecutor Danny Davidson, who processed the case but couldn’t remember it specifically. “I bet you almost anything they were in Houston. Good place to get dope.”

Mr. Ceglia wasn’t into drugs, friends and associates said. It sounded more like a scheme to make a quick buck, they speculated, by pushing the envelope again.

Around 1998, Mr. Ceglia married a Wellsville girl six years his junior, sources recalled; they now have two sons. Iasia McCarthy Ceglia left faint impressions on her husband’s associates, who described her as “nice;” one called her “kind of the flower child type.” The pair had an open relationship, associates told Betabeat, and Mr. Ceglia continued to have girlfriends after his marriage.

A year or two before his wife became pregnant, Mr. Ceglia stumbled into some good contract work: taking pictures for a Massachussetts-based startup called StreetDelivery.com, a database of street photographs for use by insurance companies. StreetDelivery’s founder, Andrew Logan, described him as gracious, competent and “not overly bright.” Mr. Ceglia would bring “cookies, or a little gift” when he came into the office, he said. “Nice guy to deal with,” Mr. Logan said. “But he was a hippie.” He offered as evidence the fact that Mr. Ceglia preferred patterned stationery.

Mr. Ceglia and his boss ended up in a legal dispute over the ownership of the photographs Mr. Ceglia had taken, but the argument was settled in a relatively non-confrontational mediation, Mr. Logan said. Within a year, Mr. Ceglia asked to come work for StreetDelivery again, and Mr. Logan agreed—until he learned that Mr. Ceglia was plotting to launch a competitor called StreetFax. “When we found out, we just stopped paying him and got an attorney,” Mr. Logan recalled. “We might have owed him $10,000 or 20,000, and we just said, ‘the hell with you.’” Mr. Ceglia and Iasia, who was by then pregnant, protested in front of Mr. Logan’s office. “They came to where I work, she with her big belly, with a sign that said I didn’t pay my bills, walking back and forth,” he said. They left after a few hours.

About seven years later, a private investigator turned up at Mr. Logan’s office, asking about Paul Ceglia. “Kroll Associates was up here investigating on behalf of Facebook,” Mr. Logan said. “Showed up one day and scared everyone half to death. At some point there were supposedly some emails, supposedly Paul yelling at Zuckerberg and swearing at him. ‘Grow a set’ or something like that. All I can tell you is, Paul was a pacifist … when he started his company he put out an advertisement about how he didn’t have sickness days, he had wellness days. He didn’t swear. He was very non-confrontational. He was real earthy, crunchy granola guy.”

Mr. Logan believes his contract with Mr. Ceglia for StreetDelivery might entitle him to a share of Facebook as well. “I have the contract buried somewhere in my work shop,” he said.

Dave Wilson, a contract photographer for StreetDelivery at the same time as Mr. Ceglia, said Mr. Ceglia’s work was sloppy at best. “He was making claims for work that he had done, that he had not done,” Mr. Wilson said. Mr. Ceglia tried to convince his former coworker to join StreetFax, but Mr. Wilson declined. At StreetDelivery, Mr. Wilson recalled not being able to find half the photos Mr. Ceglia claimed to have taken. “It was left to me to clean up the mess he had created,” he said. “Either he was just lying or he was spacey.”

Instead, Mr. Wilson started his own StreetDelivery competitor, StreetsOfCanada.com, which he ran for six years.

“I clearly remember having a conversation with Paul when he was trying to get me interested in his project,” Mr. Wilson said. “He claimed he had a Harvard grad doing the programming for StreetFax. And why I clearly remember that was, I remember that Paul was a nice guy, but prone to exaggeration. And I remember rolling my eyes at that.” This would have been in early 2003, after Mr. Ceglia and Mr. Zuckerberg signed an agreement for contract work in the lobby of a Boston Radisson.

As the StreetFax saga played itself out, the resourceful Mr. Ceglia had already found a new outlet: real estate. “Ceglia’s sale of land in New York and Florida appears to have been a wide-ranging land scam involving misrepresentation, ‘shill bidding’ on eBay, falsification of government documents, and, in some cases, outright theft,” wrote an investigator for Kroll Associates, the high-profile New York-based consulting firm—“corporate spies,” the New York Post called them—hired by Facebook to do a background check.

(Mr. Ceglia has said he left Wellsville because investigators were stalking him. “From waking up to discover people hiding in [a] back field with binoculars, to being followed day-in and day-out by these guys, to coming home and finding a back window open that I know I personally locked,” he wrote to the Wellsville Daily Reporter.)

According to the Kroll report, Mr. Ceglia would buy unbuildable properties for dirt cheap, then advertise them on eBay as buildable. In a typical story, one buyer paid $10,300 and $17,600 for two tracts in Polk County, Florida, which were advertised as “zoned as residential.” They weren’t. “Polk County officials informed Victim-1 that the land was essentially worthless,” the Kroll report stated.

Mr. Ceglia was also arrested for trespassing in Miami while “trying to sell property in a private orange grove to an elderly couple,” in May 2005, according to one of Facebook’s filings, and “falsely told the arresting officer that he had an easement along the grove.” The rightful owner pressed charges; Mr. Ceglia pleaded no contest to first-degree misdemeanor trespass and was fined.

Mr. Ceglia also sold property in New York to people like Gary Conklin, a local businessman who later found out the land wasn’t paid off and had outstanding taxes. “He was kind of a braggert,” Mr. Conklin said, recalling a stroll he and Mr. Ceglia took in the woods on their first meeting. “He talked about other things he had going on. He owned property in Florida, supposedly. He talked about StreetFax … it was a computerized camera thing to monitor street intersections and stoplights. I told my wife, this guy’s really sharp, you know? He seemed like a real go-getter.”

Mr. Conklin won a judgment against Mr. Ceglia in court in 2008. But it wasn’t until the Facebook case that he got reimbursed in full, he said. “His attorney called me and they wanted to settle up what they owed me. So he did and pretty much that’s the last I ever heard of the guy,” he said. “He’s a conniver.”

In 2006, Mr. Ceglia started corresponding by email with Bill Castle, a woodsman, winemaker and strict environmentalist who “looks like a hippie Walt Whitman,” according to The Guardian. Mr. Castle was the proprietor of Pollywogg Hollër, an eco-friendly bed and breakfast in Belmont, New York. Mr. Ceglia wanted the hotelier’s advice on an eco-friendly resort he wanted to build in the Bahamas. After about a year, Mr. Ceglia convinced Mr. Castle to join him on Great Exuma Island and help the venture get off its feet. Mr. Castle did him one better, bringing along his wife and a business partner. “We thought we were going to be down there for a long time, maybe the rest of our lives,” Mr. Castle said.

Mr. Ceglia had promised him a house, a car, a $1,000 per month stipend and groceries, none of which panned out. “The house didn’t exist,” Mr. Castle said. “The vehicle didn’t exist. We had to move in with Paul, his wife and his girlfriend.” It was a big house on the beach, he recalled, and Mr. Ceglia didn’t seem to be struggling, although he slept in the same bed as his girlfriend, his wife and their young sons. “He was spending money on the island,” Mr. Castle said. “He’d rent a car. One night he’d take his girlfriend out to supper, then the next night he’d take his wife out to supper.”

Mr. Ceglia was trying to get some land from the government, said Mr. Castle, who believes he was brought in to lend legitimacy to the project. “I was there more or less as a decoy,” Mr. Castle said. But he became suspicious when Mr. Ceglia started talking about using termite-resistant pressure-treated wood to build houses. “I’m thinking, wait a minute now, he’s supposed to be working with the island community to develop this as an eco-resort and I haven’t got an explanation for how man can live in harmony with nature and use this pressure-treated wood. Within 10 days it was obvious that the whole thing was a scam.”

Mr. Castle and his crew packed up and flew home. He later asked Mr. Ceglia to reimburse him for the trip; he says Mr. Ceglia responded by threatening to sue him for abandoning the project. “The guy is incredibly intelligent,” Mr. Castle said. “He has an incredible charisma about him. I’ve always said, if he would have taken all his talent and directed them in an honest direction, he would be making money.”

But it was actually the fraud charges concerning Mr. Ceglia’s company, Allegany Pellets LLC, that led to the rediscovery of the contract with Mark Zuckerberg, Mr. Ceglia told Bloomberg last year. Attorney General Andrew Cuomo charged the Ceglias in 2009 with defrauding customers who preordered wood pellets and never got them. According to court documents, the Ceglias blamed the failure on flooding, mechanical failures, flaky suppliers, and obstacles such as “not enough pellets to fill truck.” “I feel terrible,” Mrs. Ceglia told Bloomberg. “We had many sleepless nights.”

Kenneth Dewert, who gave Mr. Ceglia a down payment of $2,280 for a “tractor-trailer load” of pellets that never came, decided to confront him in person. “He kept on putting me off and putting me off, so me and my wife drove up there,” he said. “All there was, was a little pile of sawdust, and he said he didn’t have no money cause his machines were all broke down.” Mr. Ceglia showed them around the property, which was nothing like the red barn, wide fields and tall stacks pictured on the website. “He just had a rundown house, rundown little garage. He kept on apologizing—‘I’m sorry, sorry, yours is the first order to go out. But he was telling everyone that,’” Mr. Dewert said. The Attorney General ordered the Ceglias to pay restitution and fines last year, and they complied.

The investigation inspired Mr. Ceglia to look through old files to pay back customers, he said, otherwise “no way I would have ever started looking through these ancient folders. That contract would just be sitting in there gathering dust.”

Mr. Ceglia denied our a Facebook friend request in addition to our requests for an interview, so we had to content ourselves with his publicly available profile, which features photos of his two boys on a boat in Nova Scotia and pictures of Mr. Ceglia in front of a palm tree, with his wife, and at home in Wellsville, always smiling. Mr. Ceglia’s list of favorite quotations, along with stand-bys from Gandhi, Einstein and Margaret Mead, includes a line from Willy Wonka: “Invention, my dear friends, is 93 percent perspiration, six percent electricity, four percent evaporation, and two percent butterscotch ripple.”

This article appeared in The New York Observer on Wednesday, Sept. 21, 2011.

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