John Paulson, the billionaire whose hedge fund is the largest shareholder of Boston Scinetific Corp. (NYSE:BSX) stock, is seeking shelter from the fallout billowing around his head after he was named but not charged in a Securities & Exchange Commission indictment of Goldman Sachs Co. over sub-prime mortgages.

The SEC filed a civil suit against Goldman Sachs April 16, accusing the firm of misleading the public with statements concerning the sub-prime mortgage securities whose collapse helped precipitate the near-meltdown of the global financial market.

Paulson, who runs New York-based investment fund Paulson & Co. Inc., which owns more than 99 million shares of Boston Scientific, allegedly created a fund for high-risk mortgages he knew would fail and then bet against to gain a profit in April 2007, according to the indictment.

According to the SEC’s indictment, Paulson played a significant and hidden role in the portfolio selection process. He’s alleged to have paid $15 million to Goldman Sachs to create a collection of collateralized debt obligations for Goldman investors. The CDO, ABACUS 2007-AC1, was marketed to the public as a solid investment, even though Goldman Sachs and Paulson allegedly knew otherwise. The so-called junk assets cost investors more than $1 billion in losses; Paulson, who staked his hedge fund’s fortunes on the failure of the CDO, gained approximately $1 billion from the collapse.

Now Paulson is mounting a defense of Paulson & Co.’s actions, telling investors that the scandal will not affect his firm’s fortunes.

In a conference call with about 100 Paulson & Co. investors April 19, he reassured his backers that the case would not distract him and that the intense scrutiny would eventually die down, according to the Wall Street Journal. Paulson told the investors that the Goldman deal was a so-called "short" on the mortgage bonds, according to the newspaper, explaining that the trade’s structure "required both a ‘long’ and ‘short’ investor, suggesting that investors knew that a bearish investor had bet against the deal," the Journal reported.

Paulson blamed the ratings firms that over-valued the bonds and said investors who lost out on the deal "didn’t do enough of their homework," according to the newspaper.

Paulson & Co.’s investors have until April 23 to tell the company they want to to pull their money out of the fund June 30. None have taken the firm up on the offer, Paulson said during the call.

In a letter to investors, Paulson wrote that the deal was based on the premise that high-risk borrowers would default on their mortgages.

"We believed that the two-year adjustable rate mortgages made to lower income borrowers with poor credit history, little or no documentation, no down payment and rates that would shortly reset at usurious interest rates set the stage for significant delinquencies and foreclosures, thus eroding the value of these securities," he wrote in the letter, a copy of which was obtained by the Financial Times. "Paulson was transparent and open regarding its concerns about the mortgage market which were driven by analysis of publicly available data."