In a surprising turn of events, billionaire investor John Paulson has retaliated against his former business partner, Fahad Ghaffar, by filing a RICO suit that alleges 21 counts of misconduct and seeks $189.6 million in damages. This dramatic legal battle has unfolded in the US District Court for the District of Puerto Rico, with Paulson’s PRV Holdings taking the legal offensive. The lawsuit accuses Ghaffar of committing fraud, breach of fiduciary duty, and misuse of company funds for his personal benefit. The allegations paint a picture of lavish spending, secret shell companies, and a web of deceit that has left Paulson seeking justice.
The 70-page lawsuit filed by PRV Holdings shines a light on Ghaffar’s alleged misdeeds during his time as Paulson’s business partner. It claims that Ghaffar knowingly embezzled millions of dollars from the company’s accounts between 2021 and 2023, funding his lavish lifestyle at the expense of Paulson and PRV Holdings. The suit alleges that Ghaffar used multiple American Express credit cards, assigned some of them to team members, and manipulated transactions to hide the nature of his personal spending. According to the lawsuit, Ghaffar splurged on extravagant nightclub outings, designer clothing, and luxury shopping trips. Shockingly, he is accused of spending $8,000 on a single night out at Marquee in NYC and dropping more than $45,000 at Chanel. The suit also claims that Ghaffar redirected business to a shell company, charging Paulson over $400,000 for private jet expenses. Furthermore, Ghaffar is accused of deceitfully adding domestic workers to the books of a holding company linked to their hotel investments.
The ramifications of Ghaffar’s actions allegedly extended beyond financial impropriety. The lawsuit contends that he engaged in insurance fraud, tax fraud, and set up a sham charitable foundation. Ghaffar is also accused of extortion and planting false evidence to serve his own interests. The suit implicates several members of Ghaffar’s family, suggesting their involvement in diverting business and inflating the cost of goods and services provided to increase commissions. The discovery of Ghaffar’s alleged misdeeds came to light when he embarked on an extended vacation on his newly acquired yacht in the Mediterranean. These revelations have undoubtedly tarnished the previously amicable relationship between Paulson and Ghaffar.
Ghaffar’s attorney, Martin Russo, dismisses Paulson’s countersuit as nothing more than a publicity stunt. He challenges the validity of Paulson’s allegations and expresses confidence in their ability to dismantle the lawsuit and vindicate his client and his family. On the other hand, the attorneys representing Paulson and PRV Holdings, Terrence Oved and Darren Oved of Oved & Oved LLP, emphasize the gravity of Ghaffar’s alleged misconduct. They contend that the lawsuit demonstrates the extensive nature of his wrongdoing, further implicating him in a web of deceit and personal enrichment at their client’s expense.
This legal battle between two prominent figures in the business world is far from reaching a resolution. Following Ghaffar’s $50 million lawsuit against Paulson in September, which accused him of fraud and breach of contract, Paulson has banned Ghaffar from the hotel properties in Puerto Rico. Additionally, Paulson filed a motion to dismiss Ghaffar’s claims, asserting that there was no fraud, misconduct, or misrepresentation on his part. Meanwhile, Paulson is also simultaneously navigating an acrimonious divorce, with his wife seeking a staggering $1 billion in their split. It remains to be seen how this complex legal entanglement will unfold and what the ultimate outcome will be for John Paulson, Fahad Ghaffar, and their respective reputations.