What happened
HPS Investment Partners, the private credit unit BlackRock acquired in July 2025, discovered that receivables pledged as collateral by telecom entrepreneur Bankim Brahmbhatt's companies were fabricated. HPS had lent against purported invoices from major telecom carriers since 2020 and described the scheme in Delaware court filings as an extraordinarily brazen and widespread fraud. The U.S. Attorney's Office for the Eastern District of New York opened an investigation, reported publicly in November 2025.
How the deception worked
The borrower supplied invoices purporting to come from large international telecom carriers as collateral for a revolving credit facility, backed by supporting correspondence from email domains crafted to look like those carriers. Credit analysts and underwriters accepted the documents as third-party confirmation of real receivables, and the pattern held for roughly five years because each new drawdown was validated against the same fabricated paper trail. The deception unravelled only when an HPS analyst compared the email domains on the invoices against the real carriers' domains and found mismatches, then found the same discrepancy repeatedly across the portfolio.
The control that would have caught it· our reading, not a claim from the sources
Out-of-band verification of receivables directly with the named obligor, using contact details sourced independently rather than from the borrower's own documents, would have exposed the fabricated counterparties years earlier.
Sources (3)
- US Probes Telecom Firms After BlackRock's HPS Uncovers Alleged $400M FraudU.S. News / Reuters·usnews.comOpen ↗
- How Fake Invoices Duped BlackRock Unit Into a $400 Million Loan (WSJ)Securities Docket / The Wall Street Journal·securitiesdocket.comOpen ↗
- BlackRock Unit Flags Suspected $400 Million Fraud, Triggering U.S. Probe of Telecom FirmsYahoo Finance / Bloomberg·finance.yahoo.comOpen ↗
This entry summarises public reporting. It is not a legal finding, and details can change as investigations conclude. Found an error? Send a correction.