UPDATE 1-NY man who sued Facebook faces criminal charges

* Man who claimed Facebook stake arrested at NY home

* Ceglia charged with mail fraud and wire fraud

* Facebook lawyer says man schemed to deceive courts

Oct 26 (Reuters) - A New York man was arrested on Friday on charges he forged documents in a multibillion-dollar scheme to defraud Facebook Inc and its chief executive, Mark Zuckerberg.

Paul Ceglia, a wood-pellet salesman from Wellsville, New York, was charged with mail fraud and wire fraud over what the U.S. Attorney's Office in Manhattan said was fabricated evidence to support his claim of a large ownership stake in Facebook.

His lawyer could not immediately be reached for comment.

The businessman sued Facebook and its CEO in 2010 claiming a 2003 contract he signed with Zuckerberg, then a Harvard University student, entitled him to a stake in the social media company. This past March, as part of that case, Facebook released emails sent by Zuckerberg around the time of the contract to show Ceglia's claims were false.

``Ceglia used the federal court system to perpetuate his fraud and will now be held accountable for his criminal scheme,'' Orin Snyder, a partner at law firm Gibson Dunn representing Facebook and Zuckerberg in the civil case, said in a statement.

Ceglia, 39, was arrested at his home Friday morning and was to appear in federal court in Buffalo later in the day, authorities said.

Investigators for the U.S. Postal Inspection Service, which is conducting the probe, made the arrest following Ceglia's return this week after spending time out of the country, according to a source familiar with the matter who was not authorized to speak publicly on the case.

The case is USA v. Paul Ceglia, U.S. District Court, Southern District of New York.