Hedge fund billionaire John Paulson sued for $50million by his longtime business partner in Puerto Rico who claims he LIED about fraudulent $17millon luxury car dealership investment

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

Paulson, 67, has been working with Fahad Ghaffar in Puerto Rico since 2013, but a legal complaint has now driven a wedge between the two men – with Ghaffar claiming the investment was “misrepresented” to him.

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

The complaint, filed last week in federal court, alleges that Ghaffar believed he would earn an extra 10 percent for his work for the company — and repeatedly requested documentation.

But Paulson and his lawyers continued to “misrepresent” Ghaffar that he had purchased a half stake in the luxury car company, court documents show.

Paulson has denied the allegations, calling them “baseless,” with a spokesperson for his company confirming that an internal investigation has been launched into Ghaffar’s actions.

They added that they plan to file their own counter-complaint against Ghaffar.

“This action is a baseless attempt to divert attention from the gross misconduct committed by Fahad Ghaffar. We are conducting an independent investigation to fully document these cases,” a spokesperson for Paulson PRv said.

“We will file a complaint that will reveal numerous instances of misconduct, misappropriation of funds, fraud and self-dealing involving himself, family members and associates across nearly all Paulson entities in Puerto Rico. Fahad was a former director of Paulson PRV and was dismissed for cause on July 31.

“Fahad no longer has any responsibilities with Paulson PRV or any of its subsidiaries.”

The billionaire had just purchased the dealership for $103 million in February 2022 and promised Ghaffar that he would invest in a convertible bond that would ultimately give him the 50 percent.

But Ghaffar claims he never received the note, despite transferring the $17 million, and claims in court documents that he became CEO of F40 without pay.

He performed the work under the promised terms of the note, and says in the filing that Paulson sent him an email in August removing him from his position.

The lawsuit states: “Ghaffar would not have purchased the convertible note and invested $17 million if Paulson had not made misrepresentations regarding the convertible note, including his promise to provide documentation regarding it.

“Ghaffar would not have worked tirelessly on behalf of F40 to increase profits for Paulson’s benefit if Paulson had not made misrepresentations regarding the Convertible Note.”

Ghaffar claims Paulson asked for his investment because the billionaire became “skittish” about Puerto Rico.

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

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

The lawsuit alleges that Paulson “exploited Mr. Ghaffar for 16 months while paying lip service to the misrepresented terms of the convertible note, which he plainly never had the opportunity to produce.”

Ghaffar is suing Paulson for securities fraud, unjust enrichment in violation of Puerto Rican law, breach of contract, fraud, damages, violation of Puerto Rico’s Uniform Securities Law, and constructive trust.

He is 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 purchasing two iconic hotels in San Juan, the Condado Vanderbilt and La Concha, which he and his company bought for $260 million in 2014.

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

The billionaire, who is worth about $3 million according to Forbes, made his fortune by shorting, or betting against, subprime mortgages in the run-up to the 2008 financial crisis.

He recently made 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 he has told friends he wants to marry nutrition influencer Alina de Almeida, who is almost half his age – and that he wants to ‘have a baby with her’.

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