Investor sues Ghaffar brothers over failed tech venture
A California investor with business interests in Puerto Rico has filed a federal lawsuit accusing Fahad and Amir Ghaffar of defrauding him of millions through what he describes as a failed technology investment.
The complaint, filed by Michael Tennenbaum as trustee of the Estancias Twelve Trust, alleges that the Ghaffar brothers “knowingly and fraudulently induced” him to invest $4.4 million in Innoveo Inc., a company they allegedly misrepresented as a fast-growing software firm positioned for success.
The case, filed in the U.S. District Court for the District of Puerto Rico, has been assigned to Senior Judge Francisco A. Besosa and remains pending. No ruling has been made, and the defendants have not yet filed a response.
Fahad Ghaffar has previously drawn attention for his partnership with billionaire investor John Paulson through Paulson Puerto Rico and their subsequent legal dispute. Paulson sued Ghaffar, accusing him of self-dealing and mismanagement. That case remains unresolved.
According to the new filing, the Ghaffar brothers “presented Innoveo as a cutting-edge technology firm poised for market disruption,” when the company “was insolvent, lacked the proprietary software it claimed to own, and was artificially propped up by internal dealings designed to mislead investors.”
Tennenbaum, a philanthropist and investor active in Puerto Rico’s economy, claims he was deceived through what he believed was a personal friendship and professional trust.
“Fahad concentrated his efforts into earning Tennenbaum’s trust by assuring him that he was a loyal friend and almost like a brother,” the lawsuit states.
The complaint outlines a series of alleged misrepresentations, including assertions that Innoveo had secured commitments from other high-profile investors and owned advanced insurance and financial technology software.
According to court documents, the brothers “engaged in a calculated scheme of deception” beginning in early 2021, convincing Tennenbaum to invest $4 million through his trust, followed by another $435,307 the next year.
The complaint further alleges they “manipulated legal representation to control the flow of information” by using a law firm loyal to Fahad Ghaffar to facilitate the deal.
Tennenbaum asserts that Innoveo’s finances quickly deteriorated and, despite repeated assurances from the brothers, the company collapsed.
“The software touted as ‘cutting-edge’ never existed in the form or functionality described,” the filing says, adding that much of the firm’s reported growth was fabricated through internal contracts tied to entities controlled by Fahad Ghaffar.
By 2024, Innoveo’s board had approved a plan to cease operations and sell its assets after failing to secure new funding. The sale, which produced only a fraction of the invested capital, confirmed to Tennenbaum that the company’s value had been “grossly inflated,” according to the complaint.
The filing seeks more than $1.5 million in damages and cites multiple causes of action, including federal securities fraud, unjust enrichment and violations of Puerto Rico’s Civil Code and Uniform Securities Act.
“The Ghaffar brothers’ misrepresentations were deliberate, coordinated and made with full knowledge of their falsity,” the lawsuit claims, alleging that the defendants enriched themselves through compensation and influence while the trust absorbed the losses.
As of publication time, the Ghaffar brothers had not publicly commented on the lawsuit, according to court records and published reports.
