Hedge fund billionaire John Paulson has been hit with a $50million lawsuit by his longtime business partner over allegations he got him to invest $17million in a fraudulent deal.

Paulson, 67, has worked with Fahad Ghaffar in Puerto Rico since 2013, but a legal complaint has now lodged a wedge between the two men – with Ghaffar claiming the investment was ‘misrepresented’ to him.

Ghaffar, 42, invested the money into Paulson’s F40 luxury car company in 2022, under the agreement that it would be converted into a 50 percent equity stake.

The complaint filed in federal court last week states that Ghaffar believed he was set to earn an additional 10 percent for his work for the company – and repeatedly requested documentation.

But Paulson and his attorneys continued to ‘misrepresent’ to Ghaffar that he had bought half of the interest in the luxury car company, according to court documents.

Paulson (right) , 67, has worked with Fahad Ghaffar (left)  in Puerto Rico since 2013, but a legal complaint has now lodged a wedge between the two men – with Ghaffar claiming the investment was 'misrepresented' to him

Paulson (right) , 67, has worked with Fahad Ghaffar (left)  in Puerto Rico since 2013, but a legal complaint has now lodged a wedge between the two men – with Ghaffar claiming the investment was ‘misrepresented’ to him

Paulson and his attorneys continued to 'misrepresent' to Ghaffar that he had bought half of the interest in the luxury car company, according to court documents

Paulson and his attorneys continued to ‘misrepresent’ to Ghaffar that he had bought half of the interest in the luxury car company, according to court documents

Paulson has denied the allegations, calling them ‘baseless’, with a spokesman for his firm confirming an internal investigation has been launched into Ghaffar’s actions.

They added they are planning to file their own counter-complaint against Ghaffar.

‘This action is a baseless attempt to deflect attention from the gross misconduct that Fahad Ghaffar has committed. We are conducting an independent investigation to fully document these cases,’ said a Paulson PRv spokesperson.

‘We will be filing a complaint which will show numerous instances of misconduct, misappropriation of funds, fraud and self-dealing involving himself, family members and associates across almost all Paulson entities in Puerto Rico. Fahad was a former executive of Paulson PRV and was terminated, for cause, on July 31. 

‘Fahad no longer has any responsibilities at Paulson PRV or any of its affiliates.’

The billionaire had just bought the dealership for $103 million in February 2022, promising Ghaffar his investment was in a convertible note which would eventually give him the 50 percent.

But Ghaffar states that he was never given the note, despite wiring the $17 million, and alleges in the court documents that he became the chief executive officer of F40 without pay.

He carried out the work on the basis of the promised terms of the note, and says in the filing that Paulson emailed him in August to remove him from his role.

The suit states: ‘Ghaffar would not have purchased the convertible note and invested $17 million, but for Paulson’s misrepresentations regarding the convertible note, including his promise to deliver documentation thereof.

‘Ghaffar would not have worked tirelessly on behalf of F40 to increase its profits for the benefit of Paulson, but for Paulson’s misrepresentations regarding the Convertible Note.’

Ghaffar claims that Paulson asked for his investment because the billionaire became ‘skittish’ about Puerto Rico.

The billionaire had just bought the dealership for $103 million in February 2022, promising Ghaffar his investment was in a convertible note which would eventually give him the 50 percent

The billionaire had just bought the dealership for $103 million in February 2022, promising Ghaffar his investment was in a convertible note which would eventually give him the 50 percent

Ghaffar, 42, invested the money into Paulson's F40 luxury car company in 2022, under the agreement that it would be converted into a 50 percent equity stake

Ghaffar, 42, invested the money into Paulson’s F40 luxury car company in 2022, under the agreement that it would be converted into a 50 percent equity stake

Paulson is currently in the midst of a bitter divorce with his ex-wife, and is dating influencer Alina de Almeida

Paulson is currently in the midst of a bitter divorce with his ex-wife, and is dating influencer Alina de Almeida

He has previously invested heavily in hotels and other businesses within the US territory – predicting it would become the ‘Singapore of the Caribbean’.

According to the court documents, the pair met in 2013, with Ghaffar’s website claiming they spoke when Paulson was in contract to buy the St. Regis Bahia Beach resort.

The suit states Paulson ‘exploited Mr. Ghaffar for 16 months of services while giving lip service to the misrepresented terms of the convertible note which he slickly failed to ever produce.’ 

Ghaffar is suing Paulson for securities fraud, unjust enrichment in violation of Puerto Rican law, breach of contract, fraud, damages, violation of the uniform securities act of Puerto Rico and constructive trust.

He’s seeking at least $50 million in damages, proof of the contract between Ghaffar and Paulson and attorneys’ fees.

Paulson floated the possibility of moving to the island for years after buying two iconic hotels in San Juan, the Condado Vanderbilt and La Concha, which he his firm bought for $260 million in 2014.

Paulson is in the midst of an ugly multi-billion dollar divorce from his wife Jenny, 51, with the couple having no prenuptial agreement

Paulson is in the midst of an ugly multi-billion dollar divorce from his wife Jenny, 51, with the couple having no prenuptial agreement 

Paulson's new girlfriend, Alina de Almeida, 34, flashing her trim abs in sportswear on her company's Instagram

Paulson’s new girlfriend, Alina de Almeida, 34, flashing her trim abs in sportswear on her company’s Instagram

John Paulson with new girlfriend Alina de Almeida, 34, sitting close together at the US Open in September

John Paulson with Alina de Almeida sitting close together at the US Open in September

But he never made the move, and a spokesman told Bloomberg in 2022 that he no longer plans to do so.

The billionaire, estimated to be worth around $3million by Forbes,  made his fortune by shorting subprime mortgages, or betting against them, in the run-up to the 2008 financial crisis.

He recently hit headlines for saying he wants to marry his 34-year-old girlfriend after moving her into his Fifth Avenue apartment.

Paulson is in the midst of an ugly multi-billion dollar divorce from his wife Jenny, 51, with the couple having no prenuptial agreement.

In July 2022, Jenny Paulson sued John over allegations that he hid billions of dollars in secret trusts that cut her off from her share of his fortune, court papers show. 

Sources claim that he told pals he wants to marry nutrition influencer, Alina de Almeida, who is almost half his age – as well as saying he ‘wants to have a baby with her’.

The pair, who are now thought to share Paulson’s swanky Manhattan home, have taken their relationship public at glitzy events since he filed for divorce in November last year.

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