Billionaire John Paulson — whose former business partner Fahad Ghaffar has filed a $50 million lawsuit against him alleging fraud — has now hit back with a RICO suit, claiming 21 counts of misconduct and demanding $189.6 million in damages.
The 70-page lawsuit filed by Paulson’s PRV Holdings in the US District Court for the District of Puerto Rico alleges that Ghaffar committed fraud, breach of fiduciary duty and spent $3.4 million of company money on pricey personal expenses like private jets, nightclubs, luxe shopping trips at Chanel and dinner at celebrity hotspot Carbone.
Paulson and Ghaffar worked closely together on several Puerto Rico properties including La Concha Hotel, the Vanderbilt Hotel, the Condado Beach Club, the St. Regis Hotel and the Bahia Beach Resort.
“Between at least 2021 and 2023, Fahad knowingly and willfully embezzled millions of dollars from Plaintiffs’ accounts to fund his lavish lifestyle,” reads the suit which claims Ghaffar, “had 22 American Express credit cards tied to his personal accounts and used them and/or assigned them to other team members as part of his efforts to conceal the nature of his transactions and blend his personal transactions with others to be reimbursed.”
The suit accuses Ghaffar of splashing out $20,000 at the Omnia in Las Vegas on “personal nightclubbing, drinking and partying,” and spending $8,000 on a night out at Marquee in NYC.
The court papers claim he also racked up a huge tab on designer clothing, dropping more than $45,000 on Chanel, and $102,000 “in personal Louis Vuitton purchases in St. Barths.”
The suit further alleges that Ghaffar set up a shell company used to charge Paulson more than $400,000 on private jets, and that he “devised a scheme and artifice to defraud” by adding domestic workers like “babysitters, maids, handymen, and other housekeepers” to the books of a holding company tied to Ghaffar and Paulson’s hotel investments.
The suit also names several of Ghaffar’s family members.
The suit accuses him of “diverting business to himself and his family members for their enrichment and to the detriment of Paulson, fraudulently inflating the cost of goods and services provided by family members to increase commissions relating to that business, systematically diverting money and other benefits to his co-conspirators and shell entities for no consideration or based on false pretenses, insurance fraud, tax fraud, setting up a sham charitable foundation, extortion and planting false evidence.”
The papers claim his alleged misdeeds were discovered when, “Fahad went on a two-month vacation on his recently purchased yacht in the Mediterranean.”
Ghaffar’s attorney Martin Russo tells Page Six he thinks the lawsuit is a “stunt.”
“This complaint is a publicity stunt,” Russo says. “The fact that Paulson leads with Civil RICO indicates the weakness of his allegations and inability to prove any real misconduct. We look forward to dismantling their lawsuit and vindicating Mr. Ghaffar and his family.”
Terrence Oved and Darren Oved of Oved & Oved LLP, the attorneys for John Paulson and Paulson PRV Holdings, commented, “The complaint demonstrates the vast extent of Ghaffar’s misconduct.”
Ghaffar, who was let go in August, filed a $50 million suit against Paulson in September over allegations of fraud and breach of contract involving a $17 million investment into Paulson’s F40 car company.
Since Ghaffar filed the suit, Paulson has since banned him from the hotel properties Puerto Rico. Last week, Paulson filed a motion to dismiss stating, “There was no fraud, no deceit, no misconduct, and no misrepresentations on the part of the Paulson Defendants.”
Paulson, who became famous for shorting the housing market in 2007, is also going through an acrimonious divorce with his wife who is seeking $1 billion in their split.
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