NEW YORK — In what U.S. lenders have described as a “breathtaking fraud,” BlackRock’s private-credit investing arm and several American financial institutions say they were deceived by fabricated assets and fictitious receivables tied to the businesses of Bankim Brahmbhatt, an Indian-origin telecom entrepreneur.
Brahmbhatt, who owns Broadband Telecom and Bridgevoice, stands accused of creating an elaborate network of nonexistent accounts receivable that were used as collateral to secure loans exceeding $500 million (₹4,160 crore). According to a Wall Street Journal report, the alleged scheme ensnared multiple lenders, including those linked to BNP Paribas and HPS Investment Partners, a credit giant now owned by BlackRock.
The case has stunned Wall Street’s private credit community, where lending to middle-market firms has surged in recent years amid looser underwriting standards. Lawyers for the lenders claim Brahmbhatt “built a balance sheet of assets that existed only on paper,” then shifted the purported collateral to offshore accounts in India and Mauritius.
From Credit Darling to Courtroom Drama
The saga began in September 2020, when HPS Investment Partners, backed by BNP Paribas, began lending to a financing arm associated with Brahmbhatt’s ventures. What started as a $385 million debt facility eventually expanded to $430 million by August 2024, with nearly half the loans reportedly funded by BNP Paribas.
For years, Brahmbhatt’s firms — including Carriox and other subsidiaries — were presented as established players in global telecom infrastructure, offering network and routing services to international carriers. But behind the scenes, investigators say, the borrower’s financial statements were fictional, and customer communications were falsified to create the illusion of a robust revenue pipeline.
According to court filings reviewed by the Journal, the fraud came to light when an HPS employee noticed email irregularities: messages from Carriox’s supposed clients were being sent from fake domains mimicking legitimate telecom companies. A deeper audit uncovered a pattern of digital impersonation stretching back months.
When confronted, Brahmbhatt initially dismissed HPS’s concerns, insisting there was “no cause for alarm.” Within days, he ceased responding to calls altogether.
Lawsuit, Bankruptcy, and a Disappearing CEO
In August 2025, BlackRock and its co-lenders filed a lawsuit against Brahmbhatt and his companies, alleging large-scale financial misrepresentation and fraudulent conveyance of assets. The suit accuses the businessman of “systematic deceit and asset diversion” through cross-border transfers to shell entities.
On August 12, the same day the lawsuit was filed, Brahmbhatt declared personal bankruptcy, while his companies sought protection under Chapter 11 of the U.S. Bankruptcy Code — a process allowing for corporate reorganization while shielding assets from creditors.
Chapter 11 filings reviewed by reporters indicate that the companies listed hundreds of millions in liabilities and minimal tangible assets, raising questions about the lenders’ due diligence processes.
By late October, as the WSJ story broke, Brahmbhatt’s social media presence vanished: his LinkedIn profile returned a “404 error,” and his account on X (formerly Twitter) was deleted. When journalists visited the Garden City, New York office listed under his name, they found it locked and deserted. Neighbors said they had not seen activity there “for weeks.”
An employee of a nearby office told reporters, “It’s been quiet. The doors are closed, and the nameplate is still there, but no one comes or goes.”
Fallout and Questions for Private Credit
The scandal has rattled the private-credit sector, an area of finance that has ballooned to over $2 trillion globally, largely outside traditional banking regulation. Firms like BlackRock and Apollo Global Management have expanded aggressively into the space, offering large corporate loans without the oversight imposed on banks.
Financial analysts warn that the Brahmbhatt case underscores systemic vulnerabilities — including opaque collateral verification and overreliance on borrower-provided data — that make the private-credit market susceptible to sophisticated fraud.
HPS, now under BlackRock’s ownership, has reportedly intensified its internal compliance reviews and engaged forensic investigators to trace assets potentially moved abroad.
While Brahmbhatt’s lawyers have denied all allegations, calling the claims “baseless,” the scale of the alleged deception — and the silence of the accused — has deepened unease among investors and regulators alike.
As one credit analyst put it: “When a $500 million fraud can slip through some of the world’s largest lenders, it’s not just about one borrower. It’s about a market running on trust, and that trust just took a hit.”
