Chris Dolmetsch

Bob Van Voris

David Voreacos

Bloomberg

Hedge fund billionaire John Paulson used a sham purchase of a luxury penthouse apartment in Puerto Rico to improperly enrich himself by $10 million at the expense of his family trust, his wife claims in a suit accusing him of hiding billions of dollars in assets during their divorce.<div class="paywall-selector"></div><div class="paywall">



Jenica Paulson claimed her husband agreed in 2020 to buy the apartment at the St. Regis Bahia Beach Resort for an artificially low price of $5.6 million from a 2009 family trust, which owned the property. The penthouse is currently worth $15 million, she said in an updated complaint, filed in state court in Manhattan Wednesday. The transaction effectively allowed him to remove $10 million from the trust that he wasn’t entitled to, she said.&nbsp;



John Paulson, 67, has a net worth of $5.1 billion, according to the Bloomberg Billionaires Index. In her July 2022 lawsuit, Jenica Paulson accused him of secretly setting up a trio of irrevocable trusts, ostensibly to benefit their two children but actually to shield assets for himself. She’s asking for at least $1 billion in damages.



The acrimonious split offers a rare glimpse into a high-profile divorce in New York, where matrimonial proceedings are generally confidential. John Paulson filed for divorce in September 2021. The couple doesn’t have a prenup. Days later, the New York Post reported that he was dating 35-year-old dietitian and <a href="https://fortune.com/company/facebook/" target="_blank">Instagram</a> influencer Alina De Almeida.



The parties in the case had been scheduled Thursday to argue on John Paulson’s request to throw out the suit before a state court but agreed to postpone the hearing in order to address the allegations in the amended complaint.&nbsp;



Jim Smith, a lawyer for John Paulson, told the judge that the new complaint is “doubling down” on what his client claims are flaws in the suit — namely, that it fails to add their children as necessary parties since they are beneficiaries to the trusts.



Smith said the new claim and the case may belong in another court since it alleges misconduct on part of the trustee, and that Jenica Paulson may not have standing to pursue the claim because she is not a beneficiary of the 2009 trust.&nbsp;



Robert S. Cohen, an attorney for Jenica Paulson, said the amended complaint was prompted by the lawsuit filed against John Paulson in Puerto Rico earlier this month, which “got us to look further into the matter.”



Earlier this month, John Paulson&nbsp;<a href="https://www.bloomberg.com/news/articles/2023-09-06/jon-paulson-sued-for-securities-fraud-by-puerto-rico-partner" target="_blank" rel="noreferrer noopener">was sued</a>&nbsp;by his longtime business partner in Puerto Rico, who alleges the billionaire made fraudulent claims to convince him to invest $17 million in a luxury automobile dealership on the island. Paulson denied the claims, calling them “baseless.”



John Paulson hasn’t made any payments on the Puerto Rico penthouse and has racked up hundreds of thousands of dollars in unpaid “hospitality charges,” his wife said. In addition to financial assets, the family has a bountiful portfolio of real estate investments, including an Aspen, Colorado, ranch formerly owned by a Saudi prince and an estate in the Hamptons.



The Paulsons married in 2000, after first meeting at the Bear Stearns cafeteria, where she served him and his staff. Most of his wealth was achieved during their marriage — he’s best known for betting against the US housing market ahead of the 2008 subprime crisis, making $20 billion for himself and his hedge fund investors. He turned the fund into a family office in 2020 and was&nbsp;<a href="https://www.bloomberg.com/news/articles/2022-06-23/bausch-health-names-hedge-fund-billionaire-paulson-as-chairman" target="_blank" rel="noreferrer noopener">named</a>&nbsp;chairman of Bausch Health Cos. in 2022.



In the revised complaint, Jenica Paulson also questioned why JPMorgan denied her request to distribute money to her from a 2006 trust fund that she understood was valued at more than $1 billion. The bank, as trustee, said it needed more information to determine whether the request would leave the children “adequately provided for,” according to the complaint.



But she said the bank’s demand was a pretext because it represented a tiny portion of the trust’s value. She said there’s “no possible way” the request would leave the children short of funds.



The children are the primary beneficiaries of the 2006 and 2009 trusts but haven’t received funds from either, according to the complaint.



The partner in the Puerto Rico lawsuit, Fahad Ghaffar, is asking for more than $50 million in damages from Paulson. Ghaffar claims Paulson told him in February 2022 that he would be investing his money in a convertible note that would eventually give him 50% ownership in the dealership, F40. Ghaffar claims in his lawsuit that a Paulson family trust — one of the three at issue in the New York case — had just bought the dealership for $103 million.</div>

The acrimonious split offers a rare glimpse into a high-profile divorce in New York, where matrimonial proceedings are generally confidential.

Hedge fund founder John Paulson is accused of hiding billions of dollars in a divorce that includes fighting over a luxury penthouse in Puerto Rico

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