Paulson’s Ex-Business Partner Adds JPMorgan to Fraud Lawsuit

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John Paulson’s former Puerto Rico business partner added a JPMorgan Chase & Co. unit as a co-defendant in a lawsuit he filed earlier this month accusing the hedge fund billionaire of cheating him in a $17 million investment.

Fahad Ghaffar on Wednesday filed a revised suit in federal court in Puerto Rico, claiming J.P. Morgan Trust Co. of Delaware was liable for actions taken by Paulson using a family trust for which the firm acted as a trustee. Ghaffar claims that Paulson misled him about an investment in a luxury automobile dealership on the island that was owned by the trust.

According to the suit, Paulson in February 2022 asked Ghaffar to invest his money in a convertible note that would eventually give him 50% ownership in the dealership and a real estate company, both of which the Paulson family trust had just bought for $103 million. Ghaffar claims he was never given the note and worked as the dealership’s chief executive officer without pay until he was removed from his role in August.

JPMorgan declined to comment. Paulson’s lawyers said in a statement that Ghaffar’s claims were “frivolous” and were made in retaliation for Paulson terminating their business relationship. In the revised suit, Ghaffar said he believed the trust that owned the Puerto Rico entities was the Paulson 2009 Family Trust. That trust is also one of three Paulson’s wife alleges in a separate suit in New York that he used to shield billions of dollars in assets from her in a divorce.

 

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