John Paulson is suing his former Puerto Rican business partner, accusing him and several of his family members of embezzling millions of dollars from the hedge fund billionaire to fund a lavish lifestyle.
Paulson said in a statement that Fahad Ghaffar charged Paulson entities $3.4 million in personal expenses, including $147,000 in shopping sprees at Louis Vuitton and Chanel, more than $600,000 in private jet travel, and a The cost to attend the Omnia nightclub in Las Vegas is $20,000 a night. suit The lawsuit was filed Monday in federal court in Puerto Rico. Ghaffar also allegedly funneled millions of dollars of Paulson’s business to companies owned by relatives, who charged exorbitant fees for their services.
“Although Fahd claimed to be a loyal member of Paulson’s team and a philanthropist, this was not the case,” Paulson said in the lawsuit, which charges racketeering and fraud. “For years, he and his co-conspirators extracted value from the Paulson Entities at every turn, betraying Paulson’s trust and biting the hand that fed them.”
Paulson sued Ghaffar under the civil version of the Racketeer Influenced and Corrupt Organizations Act, which is designed to combat organized crime, fraud, breach of fiduciary duty and other claims. He is seeking about $190 million in damages. Ghaffar, his wife, father-in-law, brother, two sisters and personal assistant are named as defendants, as well as several companies they allegedly founded.
Martin Russo, Ghaffar’s attorney, said “the complaint is a publicity stunt” and that he believed the racketeering accusations were exaggerated. “The fact that Paulson is leading the charge in the civil RICO demonstrates that his allegations are weak and fail to prove any actual wrongdoing. We look forward to dismissing their lawsuit and defending Mr. Ghaffar and his family.”
Monday’s lawsuit further escalates rifts exposed on Sept. 6, when Ghaffar sued the billionaire, accusing him of defrauding him when he invested $17 million in a luxury car dealership owned by Paulson. Ghaffar claims Paulson reneged on a promise to provide him with a convertible note that would eventually give him a 50% stake in the dealership.
The feud also intersects with Paulson’s legal battle in New York with his wife, Jenika, who accuses Paulson of hiding billions of dollars in assets from her in three family trust funds. Both Jenika Paulson and Gaffar claimed that John Paulson’s Puerto Rico operations, which include multiple luxury hotels, were primarily held by one of the trusts.
According to Paulson’s lawsuit, Ghaffar was an “unemployed small commercial real estate investor” in 2013 when he was looking for a “self-made, highly successful Paulson Company owner.” and “asked for a chance to work for him.” Gaffar earned Paulson’s trust over the years, starting as a junior analyst and eventually becoming the billionaire’s senior manager in Puerto Rico.
Ghaffar allegedly used the position to benefit himself and his family. According to the lawsuit, the land on which Ghaffar built his current home was given to him by the developer as payment for Paulson to overpay for the project.
50% discount
Paulson also claimed that Jaafar arranged for Paulson’s hotel to purchase $3.2 million worth of outdoor furniture from a company controlled by his wife, Glenda Acevedo-Martinez. She allegedly increased the price by 55%, taking a commission of $1 million.
Ghaffar also arranged for Paulson’s businesses to purchase insurance from his brother, who allegedly collected $48 million in premiums, the lawsuit said. Ghaffar and his brother also allegedly sold $3 million worth of “useless” software services to Paulson. One of Ghaffar’s sisters sold carpets and furniture to Paulson’s hotel, and another sold information technology equipment, both at reportedly high prices. According to Paulson, Jaafar also funneled funds to Acevedo Martinez’s father, providing him with an Audi Q3, which was paid for by Paulson’s company.
Paulson also accuses Gaffar of charging Paulson’s businesses $300,000 for a wedding, $370,000 for home maintenance, $700,000 for personal furnishings and $19,000 for several of his family members and employees. Personal cell phone service charges. Ghaffar also allegedly charged his aides for a lavish wedding held at one of Paulson’s properties, the St. Regis Bahia Beach Resort.
The lawsuit alleges that Ghaffar owed huge bills on Paulson’s properties, including $440,000 at the Condado Vanderbilt Hotel between 2020 and 2023, even though he received a generous discount, but he never paid the fee. Ghaffar allegedly arranged for himself to receive a 50% discount at the St. Regis Hotel, while Paulson himself received only a 20% discount.
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