US Probes $400 Million Private Credit Loans Amid Alleged Fraud by Bankim Brahmbhatt-Linked Firms

US prosecutors have opened an investigation into a cluster of telecom companies after BlackRock’s private credit unit, HPS Investment Partners, claimed it lent hundreds of millions of dollars against receivables that appear to be fabricated. The Department of Justice is examining entities connected to Bankim Brahmbhatt, a relatively low-profile executive behind a series of companies that borrowed substantial sums from one of the largest players in private credit, according to sources familiar with the matter.

Funds managed by HPS, acquired by BlackRock earlier this year, extended more than $400 million to companies controlled by Brahmbhatt. The loans were backed by collateral that included money the companies claimed was owed to them by major telecom groups. In a Delaware court filing earlier this year, the HPS funds accused Brahmbhatt and the companies he controlled of “an extraordinarily brazen and widespread fraud” in which “the documents purporting to evidence these receivables were fabricated.”

The HPS funds operate as specialist asset-backed finance vehicles, a niche segment within private credit. The DOJ’s inquiry is still in its early stages, and prosecutors have not charged Brahmbhatt or any associated companies with wrongdoing. Sources noted that such investigations often begin with public allegations of fraud or financial irregularities and may not ultimately result in formal charges. The inquiry forms part of a broader wave of recent DOJ probes into fraud allegations involving firms that tapped opaque private credit markets. Separate federal investigations in Manhattan have scrutinized the collapse of subprime lenders, including auto parts supplier First Brands Group and car lender Tricolor Holdings.

Brahmbhatt and several of his companies, including Bridgevoice Inc, Carriox Telecap, and Carriox Towercap, filed for bankruptcy in August, immediately halting the HPS funds’ Delaware lawsuit. A court order issued in late October noted that the parties “are continuing to engage in good faith settlement negotiations.” Scott Leonhardt, a partner at Esbrook representing Brahmbhatt and his companies, declined to comment, while Brahmbhatt himself did not respond to requests for comment. His entities are not yet required to file responses to the HPS complaint. An August filing by Brahmbhatt’s companies asserted that the HPS funds “have not demonstrated imminent irreparable harm.”

The DOJ’s investigation is being conducted by prosecutors in the Eastern District of New York, based in Brooklyn, though the office declined to comment. According to court filings, HPS first began lending to Brahmbhatt-controlled companies in 2020. In June 2025, HPS requested, for the first time, underlying email confirmations to verify the receivables and discovered that the messages had been sent from domains that did not match those used by the telecom companies. The filings state that all 16 confirmation emails “had some significant indicia of fraud,” with five telecom companies confirming that the email addresses were not associated with them. The discovery raised “serious doubt on whether the receivables… ever existed,” HPS said, adding, “If the receivables… were fabricated and never existed, then [the HPS funds] have been left entirely unsecured.”

HPS’s filings detailed that the firm had “conducted comprehensive due diligence” when it first financed the companies in 2020 and had retained third-party experts to audit the receivables annually. Of the $430 million extended, roughly half was financed using leverage from BNP Paribas, which declined to comment. After uncovering the alleged issues with the documentation, HPS contacted an unnamed “close associate” of Brahmbhatt. According to filings, this individual relayed Brahmbhatt’s explanation that telecom companies use different email domains for various business units, and later claimed that domain changes were the result of industry security breaches.

HPS has retained Quinn Emanuel to pursue its claims, according to the August court filing. Brahmbhatt is believed to maintain a residence on Long Island, New York, but is reportedly “overseas” at present.

This unfolding case underscores the risks in private credit lending when receivables are used as collateral and highlights the early stage of federal scrutiny that may or may not lead to formal charges against the executive and his network of companies.

By fLEXI tEAM