Hedge Fund Billionaire John Paulson Sues Former Business Partner for Fraud and Racketeering
Hedge fund billionaire John Paulson has filed a lawsuit against his former business partner, Fahad Ghaffar, and several members of Ghaffar’s family, alleging fraud and racketeering. Paulson claims that Ghaffar fraudulently billed Paulson entities for personal expenses amounting to $3.4 million, which included extravagant shopping sprees, private jet travel, and lavish nights out.
In addition, Ghaffar is accused of steering millions of dollars in Paulson business to firms owned by his relatives, who allegedly overcharged for their services.
Paulson, who is seeking around $190 million in damages, is suing Ghaffar under the civil version of the Racketeer Influenced and Corrupt Organizations Act. Other claims in the lawsuit include breach of fiduciary duty and fraud.
Ghaffar’s attorney dismissed the lawsuit as a publicity stunt, stating that the racketeering claim was overblown. The attorney expressed confidence in dismantling the lawsuit and vindicating Ghaffar and his family.
This legal battle between Paulson and Ghaffar escalated from a previous lawsuit where Ghaffar claimed that Paulson cheated him in a $17 million investment in a luxury automobile dealership owned by Paulson.
Furthermore, the feud is interconnected with Paulson’s ongoing legal dispute with his wife, who accuses him of hiding billions of dollars in assets from her in family trusts.
According to Paulson’s lawsuit, Ghaffar was a small-time real estate investor when he approached Paulson in 2013 and asked for an opportunity to work for him. Over the years, Ghaffar gained Paulson’s trust and eventually rose to the position of senior manager in Puerto Rico. It is alleged that Ghaffar exploited this position to enrich himself and his family members.
The lawsuit provides detailed instances of Ghaffar’s alleged misconduct, such as overpaying for a project to receive a lot for his current residence, arranging for Paulson’s hotels to purchase overpriced furniture controlled by his wife, and steering insurance contracts and software services to his relatives at inflated prices.
Ghaffar is accused of charging Paulson’s businesses for wedding expenses, home maintenance costs, personal furnishings, and even personal cell phone services. He also allegedly took advantage of discounts at Paulson properties without paying his bills.
