Billionaire John Paulson accused a longtime business partner of siphoning $3.4 million in company funds to finance his jet-set lifestyle and diverted millions more to “shell corporations” owned by his wife, according to a latest lawsuit.
Paulson — who famously reaped billions by shorting the housing market in 2007 — has been embroiled in a bitter legal battle with Fahad Ghaffar, who has worked for the mogul’s Paulson Entitities in Puerto Rico since 2013.
Ghaffar, a senior manager, billed Paulson Entities for $3.4 million in “personal expenses” between 2018 and 2023 that include $147,000 for Louis Vuitton and Chanel shopping sprees, greater than $600,000 in private jet travel and $20,000 for a single night at Las Vegas’ Omnia night club, according to the lawsuit filed in Puerto Rico federal court on Monday.
The criticism — filed days after Paulson moved to dismiss Ghaffar’s $50 million lawsuit against him — names the previous business partner, his wife Glenda Acevedo-Martinez and five other relations.
Ghaffar also arrange multiple shell corporations, one owned by his wife to hide $3.2 million and one other to embezzle $8 million from one other Paulson company, Condado Dua, the lawsuit claims.
The allegations also include claims that Ghaffar loaned his father-in-law, Glen, an Audi Q3 SUV without cost, and hired his sister, Saira, as a vendor at St. Regis — a resort owned by the billionaire’s fund Paulson & Co. — where she “inflated the worth of the items she sold to the St. Regis so as to pocket additional commissions and/or profits from the inflated costs.”
“In further abuse of his privilege, since a minimum of 2018, Fahad had Paulson pay for the private cellphones for his household employees, relatives and friends, including maids, his mother and Glenda [Ghaffar’s wife]” — totaling “over $19,000” in costs to the Paulson Entities, the suit added.
The court documents also allege that Ghaffar attempted to discredit a former Paulson Entities worker named Enrique “Ricky” Diaz who had sued Ghaffar for wrongful termination in 2021.
Ghaffar allegedly “devised a plan and offered [an] investigator $60,000 to plant a kilo of cocaine in Ricky’s automotive,” according to Diaz’s lawsuit, which Paulson’s legal team cited of their criticism to highlight Ghaffar’s alleged “pattern of racketeering.”
Ghaffar had planned to plant the drugs, “call the authorities, and have the authorities arrest and indict Ricky for narcotics possession,” Paulson’s criticism claimed.
Paulson is looking for some $190 million in damages for Ghaffar’s alleged violation of the Racketeer Influenced and Corrupt Organizations (RICO) Act, which was put into place in 1970 to take down organized crime organizations.
“The criticism demonstrates the vast extent of Ghaffar’s misconduct for which we’ll hold him accountable,” Terrence Oved of the law firm Oved & Oved — co-counsel for Paulson PRV Holdings and John Paulson’s related entities — told The Post.
Representatives for Ghaffar and his family at DMR Law didn’t immediately respond to The Post’s request for comment.
Monday’s lawsuit is just the most recent within the rift between Paulson and his ex-business partner.
Last month, Ghaffar slapped Paulson with a $50 million lawsuit over allegations of fraud and breach of contract.
Within the criticism filed in federal court, Ghaffar claimed he invested $17 million into Paulson’s F40 automotive company in 2022 that might be converted right into a 50% equity stake, though Paulson and his attorneys “continued to misrepresent” Ghaffar’s ownership within the automotive dealership enterprise.
Ghaffar was also allegedly set to earn a further 10% for his work for the corporate.
Around Aug. 18, 2023, Ghaffar claims Paulson emailed him to “remove him from all positions with F40” despite Paulson just having confirmed Ghaffar’s role as F40’s president and CEO in an email with Hyundai de San Juan.
Paulson bashed the lawsuit as “destructive and disrespectful behavior,” and banned Ghaffar from the duo’s luxury properties in Puerto Rico, citing a video — which might be found on YouTube — of Ghaffar on the Serafina restaurant situated the Paulson-owned La Concha Resort.
The Post has sought comment from Ghaffar on the video.
Paulson penned in a memo to all employees of his PRv holding company: “Within the video, Fahad, who appears to be in a highly intoxicated state, is seen breaking glasses, pushing employees, and smashing and throwing chairs.”
He continued: “One of these destructive and disrespectful behavior wouldn’t be tolerated from any customer let alone an individual with managerial responsibility… Such reprehensible behavior, as demonstrated by Fahad, is not going to be tolerated by anyone at our properties.”
The memo, sent on Sept. 13, put a direct ban on Ghaffar “from using any of our restaurants, facilities, or venues at La Concha Hotel, the Vanderbilt Hotel, the Condado Beach Club, the St. Regis Hotel and the Bahia Beach Resort. Security in any respect properties have been notified.”