Billionaire’s Biz Manager: HE’S the Cheat—and Not a Billionaire

Days after being sued for fraud by hedge fund titan John Paulson, the billionaire’s business manager hit back with a suit of his own, claiming his famous boss cheated him out of nearly $300 million—and isn’t actually worth billions.

Paulson, famous for shorting the real estate market in 2007, sued former partner Fahad Ghaffar this week for allegedly defrauding him out of $200 million while overseeing his international hotels and real estate holdings.

In his own complaint, Ghaffar claims that Paulson—whose net worth is estimated at $3.5 billion by Forbes—recently suffered losses that brought his net worth to less than $500 million. When Paulson learned that his companies owed Ghaffar hundreds of millions for his work on the hotels, the suit claims, he devised a false reason to end their contract and deny Ghaffar his earnings.

Martin Russo, an attorney for Ghaffar, said he attempted to settle the matter through arbitration but Paulson refused.

“Mr. Paulson chose to turn the resolution of the disputes between [his company] and Mr. Ghaffar into a circus by filing a dubious lawsuit and not submitting to the contractually mandated arbitration, leaving us with no choice but to bring this matter to Federal Court in Puerto Rico,” Russo said in a statement. “We have the highest confidence that Mr. Ghaffar will prevail here.”

Lawyers for Paulson, meanwhile, called Ghaffar’s suit “a sham designed solely to divert attention from his numerous criminal schemes detailed in Paulson’s complaint.”

“Paulson has many premier properties in Puerto Rico with great management which will prosper without Fahad,” Terrence and Darren Oved told The Daily Beast in a statement. “Ghaffar’s shameless exaggeration of his importance to Paulson is comical. He was terminated for cause and no longer entitled to any compensation.”

The suit marks yet another escalation in a dramatic court battle between the two former business partners, which has even bled into Paulson’s high-profile divorce proceedings.

Ghaffar met Paulson when he was hired as a junior analyst at Paulson’s hedge fund in 2013. When the boss decided to expand into Puerto Rico, Ghaffar moved to help run operations and quickly ascended to become the manager of all of Paulson’s Puerto Rican investments, including La Concha, the Condado Vanderbilt Hotel, and the St. Regis Bahia Beach Resort.

All seemed well until September, when Ghaffar sued Paulson for what he claimed was a promised stake in a luxury car business. Paulson responded on Monday with a suit claiming Ghaffar had used his position as the manager of Paulson’s elite hotels to live in luxury and enrich his family.

Paulson alleged that Ghaffar used company money to pay for personal expenses like a $4,000 meal at Carbone in Miami and an $8,000 night at Marquee nightclub in New York. He also claimed Ghaffar loaned his family luxury cars, allowed friends to stay at Paulson’s properties for free, and helped his relatives set up shell companies to defraud Paulson’s businesses.

Paulson claims he learned about Ghaffar’s deceit on a trip to Puerto Rico in June and promptly dismissed him. But in his lawsuit filed Wednesday, Ghaffar claims Paulson invented his allegations in order to break their contract and avoid paying him his full fee.

Ghaffar claims he increased Paulson’s hotel profits by 150 percent and his construction profits by 1,000 percent—achievements that should have earned him $290 million in compensation, according to the suit. Instead, he says, when Paulson learned how much he owed his business manager in a meeting in June, he became “highly agitated and uncomfortably aggressive” and directed his companies to terminate their agreements with Ghaffar shortly thereafter.

“Resorting to dishonesty and misrepresentation, Paulson ginned up grossly inadequate allegations of ‘acts of intentional misconduct or fraud against Paulson,’ and used them [as] pretext to purport to improperly terminate [their business agreement] for cause,” the suit states.

Relations between the two men are reportedly so toxic that Paulson banned Ghaffar from all of his Puerto Rican properties, citing a 2019 video of Ghaffar breaking a chair at one of his restaurants.

The dispute has also complicated Paulson’s messy divorce from his estranged wife, Jenica, who claims he is hiding millions of dollars from her in secret trusts available only to himself, his children, and his current spouse. (Paulson instigated the divorce in 2021, shacking up with Instagram influencer Alina De Almeida shortly thereafter.)

Ghaffar’s first suit inspired Jenica’s lawyers to look into Paulson’s Puerto Rico holdings, where they claim to have discovered a $15 million apartment Paulson purchased from the trust for just $5.6 million—cheating his family trust out of nearly $10 million. The estranged wife added these losses to her suit against Paulson in September, asking for at least $1 billion in damages.

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