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- John Paulson is suing his former Puerto Rico business partner.
- Fahad Ghaffar fraudulently billed the elite investor for $3.4 million, per a lawsuit filed Monday.
- Ghaffar used the scheme to fund his shopping at Chanel and partying in Las Vegas, Paulson alleges.
John Paulson is suing his former business partner in Puerto Rico, alleging that he and several family members duped the investor out of millions of dollars to fund luxury shopping sprees, Las Vegas parties, and other expenditures.
The hedge fund manager, with an estimated net worth of $3.5 billion, said in a lawsuit filed in San Juan on Monday that Fahad Ghaffar had siphoned $3.4 million out of Paulson's operations and used the money to finance his lavish lifestyle.
"Though Fahad touted himself a loyal member of the Paulson team and a philanthropist, nothing could be further from the truth," Paulson's lawyers wrote.
"For years he and his co-conspirators siphoned off value from the Paulson Entities at every turn, betraying Paulson's trust and biting the hand that had fed them," they added. "Fahad's greed corrupted the business decisions he was supposed to make for Paulson's benefit, betraying the confidence Paulson had placed in him with shocking ease."
Paulson claims that Ghaffar conspired with his wife, father-in-law, brother, two sisters, and a personal assistant to commit racketeering and fraud, and is seeking just under $190 million in damages.
The lawsuit claims that in 2021, Ghaffar spent $102,000 in Louis Vuitton stores on the luxury island of Saint Barthélemy, which he charged to Paulson as a business expense.
He allegedly splurged $45,000 at a Chanel boutique in New York City, and splashed another $20,000 in a single night of partying at the Omnia nightclub in Las Vegas, per Monday's filing.
The two men are currently locked in a bitter legal feud. Ghaffar sued Paulson earlier this month, claiming he'd been cheated out of a 50% stake in a luxury car dealership.
Paulson's wife and Ghaffar have both also accused Paulson of using his Puerto Rico businesses to hide billions of dollars' worth of assets from her during their divorce.
Ghaffar was an "unemployed small-time commercial real estate investor" who "begged for the opportunity to work for" Paulson & Co in 2013, the lawsuit alleges. Ghaffar joined the firm as a junior analyst and eventually rose to become a senior manager in Puerto Rico.
Ghaffar could not be reached for comment. His attorney didn't immediately reply to an Insider request for comment, sent outside normal working hours.