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Paulson amends RICO Act lawsuit against ex-business partner Ghaffar

Paulson PRV Holdings LLC, along with other companies, has filed an amendment to its Racketeer Influenced and Corrupt Organizations Act (RICO) complaint to include new allegations and details against former business partner Fahad Ghaffar and other parties involved in alleged fraudulent activities.

The amendment introduces ACE LLC as a new defendant, broadening the scope of the allegations and “explicitly connecting the entity to the fraudulent activities orchestrated by Ghaffar,” the plaintiffs stated.

The RICO Act is a federal law aimed at imposing severe criminal penalties and civil actions for acts performed as part of an ongoing criminal organization.

“This is why a series of actions have been specifically highlighted that demonstrate a pattern of improper behavior and violation of fiduciary duties by Ghaffar and others involved, such as his wife, Glenda Acevedo, and other close relatives,” according to a statement issued by the plaintiffs.

ACE, which Ghaffar incorporated in Puerto Rico in 2021, is now named defendant. The plaintiffs allege it was used “to be able to misrepresent his personal expenses on private jet charters and entertainment, such as lavish dinners and nightclub bottle service, for which he billed the Paulson Entities.”

The amended lawsuit also aims to establish that Paulson appointed Ghaffar to oversee investments on the island, to reveal fraud in dividend payments and money laundering, to expose the misuse of the related foundation for deceptive purposes, and to uncover a payment scheme through Dynamics Payments for personal gain.

“This action, which seeks [more than] $165.6 million in damages on behalf of Plaintiffs Paulson PRV Holdings LLC, Duo Condado JV Holdings LLC, Bahia Beach Holding Company LLC, AIP PR Holdings LLC, SJ Beach PR LLC, and Regency Acquisition LLC, is the culmination of years of criminality, deceitful machinations and underhanded self-dealing by defendant Fahad Ghaffar, to unjustly enrich himself and his family in blatant disregard of the legal duties he owed to John Paulson and his business ventures in Puerto Rico,” the amended complaint states. 

In response, Ghaffar’s attorney, Leo Aldridge, reacted to the amended complaint, saying it “doesn’t raise new information and, on the contrary, significantly reduces the amount claimed, while contradicting data previously submitted by the magnate to the court.”

“Today’s amended complaint doesn’t allege a single new fact and clearly denotes that Paulson was forced to significantly reduce the amount of money he is requesting, because after receiving two consecutive adverse rulings from the Court, he has realized that his allegations aren’t anchored in fact or law,” Aldridge said.

“Paulson lost twice last week against Fahad Ghaffar before the federal court, and today, he presents an amendment, which rather than seeking a remedy in law, what he seeks is to get news coverage,” the lawyer added.

Last week, the federal court ruled against two claims brought by Paulson within less than 72 hours, following the lawsuit filed by Ghaffar. Initially, the court declined to dismiss Ghaffar’s securities fraud lawsuit, which includes allegations of breach of contract, against Paulson.

Days later, it rejected the request to disqualify Ghaffar’s legal representatives, José Andreu-Fuentes and Alfredo Umpierre-Soler, a motion made by Paulson, who alleged there was a conflict of interest, according to Ghaffar’s defense team.

Author Details
Author Details
Business reporter with 30 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

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