A Puerto Rican judge has rejected billionaire John Paulson’s bid to dismiss a fraud lawsuit brought by his former business partner over a $17 million investment in a luxury car dealership.
U.S. District Judge Camille L. Velez Rib in San Juan, Puerto Rico, on Monday allowed Fahad Ghaffar to proceed with his securities fraud and breach of contract lawsuit against Paulson, who was allegedly barred from half of his Puerto Rico-based company. It was decided that it could be done. F40.
Gaffer, who has worked for Islander powerhouse Paulson Entities since 2013, said in his book: A $50 million lawsuit was filed in federal court last year. He reportedly invested $17 million in Paulson’s dealership in 2022, with the condition that the stake would convert to 50%.
The complaint alleges that Mr. Paulson and his attorneys “continue to misrepresent” Mr. Ghaffar’s ownership interest in the auto dealership business and that Mr. Ghaffar has been unable to obtain convertible note documentation reflecting his interest in the dealership. ing.
Mr. Ghaffar’s lawsuit alleges that Mr. Paulson once referred to Mr. Ghaffar as president and CEO of F40 in an email to Hyundai de San Juan, but shortly thereafter, on or about August 18, 2023. , which alleges Paulson sent an email requesting that he be “removed from all positions at F40.”
A spokesperson for Mr. Paulson said several months later, after Mr. Gaffer accused Mr. Paulson of a fire at one of his F40 dealerships that destroyed at least two Porsches worth more than $92,000 each. “Mr Fahad was appropriately dismissed from F40 in August,” it confirmed. Daily Beast.
In a 32-page opinion obtained by the Post, Judge Beres Rib, who dismissed three of Ghaffar’s six complaints against Paulson, wrote that the memo provided to Ghaffar was “the most fundamental part of the agreement.” It did not reflect the provisions.”
He also rejected Paulson’s argument that the notes in question were “not securities” under U.S. law.
“The securities fraud charges against Mr. Paulson are very strong and are certain to be proven,” Gaffer’s attorney Martin Russo told the Post.
“All we are saying here is that Mr. Paulson and PRV: [Paulson’s holdings company] “They persuaded Mr. Gaffer to transfer approximately $17 million in convertible notes, but then withdrew the collateral,” Russo added.
Terrence Obed and Darren Obed of the law firm Obed & Obed, co-counsel for Paulson PRV Holdings and John Paulson’s affiliates, also called the judge’s ruling “a victory for us.”
“It is significant that half of the claims against Mr. Paulson were categorically dismissed at this early stage, even though the court was forced to accept all of the plaintiffs’ allegations as true,” a company representative said Tuesday. told the Post.
“We expect the other half to be fired soon.”
Gaffar’s September lawsuit sparked a courtroom dispute between the former business partners. The two reportedly met more than a decade ago when Paulson was in a deal to buy the St. Regis Bahia Beach Resort.
Days after Mr. Paulson moved to deny Mr. Gaffer’s application, the prominent investor slammed Mr. Gaffer with a lawsuit that also named his wife, Glenda Acevedo-Martinez, and five other family members. .
Mr. Paulson accused his longtime business partner of siphoning off $3.4 million in company funds to finance his jet-setting lifestyle and diverting millions more to a “shell company” owned by his wife.
From 2018 to 2023, while serving as a senior manager in Paulson’s family office, Gaffer made $147,000 in purchases from Louis Vuitton and Chanel, more than $600,000 in private jet travel, and more than $600,000 in travel expenses. He allegedly billed Paulson Entities for $3.4 million in “personal expenses,” including $20,000. A night at Omnia Nightclub in Las Vegas.
Mr. Gaffer also set up multiple shell companies, one owned by Acevedo Martinez that hid $3.2 million, and another that embezzled $8 million from another of Paulson’s companies, Condado Dua. The lawsuit alleges that it did.
Paulson is seeking approximately $190 million in damages for Gaffer’s alleged violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act, which was enacted in 1970 to destroy organized crime organizations. ing.
