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US prosecutors are investigating a group of telecoms companies after BlackRock’s private credit unit HPS Investment Partners said it lent them hundreds of millions of dollars against receivables that appear to be fake.
The Department of Justice is examining entities linked to Bankim Brahmbhatt, a low-profile executive behind a clutch of companies that borrowed large sums from one of the biggest names in private credit, according to two people with knowledge of the matter.
Funds managed by HPS, which BlackRock bought this year, lent more than $400mn to companies connected to Brahmbhatt. The collateral securing these loans included money that the companies linked to Brahmbhatt said they were due to receive from major telecoms groups.
In a Delaware court filing this year, the HPS funds accused Brahmbhatt and companies that he controlled of “an extraordinarily brazen and widespread fraud” in which “the documents purporting to evidence these receivables were fabricated”.
The HPS funds were specialist asset-backed finance vehicles, a niche within the private credit industry.
The DoJ’s investigation is at an early stage and prosecutors have not accused Brahmbhatt or the companies of wrongdoing. The inquiry may not lead to any case being brought and it is not unusual for prosecutors to ask questions when there are public allegations of fraud or financial irregularities.
The move is one of a series of recent DoJ investigations into fraud allegations at companies that tapped opaque private credit markets.
Separately, federal prosecutors in Manhattan have looked at the collapse of auto parts supplier First Brands Group and Tricolor Holdings, the subprime car lender.
Brahmbhatt and several companies connected to him, including Bridgevoice Inc, Carriox Telecap and Carriox Towercap, filed for bankruptcy in August, a move that immediately halted the HPS funds’ Delaware case against them. A court order granted in late October said the parties “are continuing to engage in good faith settlement negotiations”.
Scott Leonhardt, a partner at the law firm Esbrook who represented Brahmbhatt and his companies in the HPS funds’ Delaware case, declined to comment. Brahmbhatt did not respond to requests for comment.
Brahmbhatt’s entities are not yet required to file their response to the HPS funds’ complaint. An August court filing by Brahmbhatt and some of the companies connected to him said the HPS funds “have not demonstrated imminent irreparable harm”.
The DoJ investigation is being carried out by prosecutors in the Brooklyn-based Eastern District of New York, the people said. The EDNY declined to comment.
The HPS funds started lending to companies controlled by Brahmbhatt in 2020, according to the funds’ Delaware court filings.
In June 2025, HPS requested — for the first time — copies of underlying email confirmations to verify receivables. The firm later discovered that messages were sent from email domain addresses that did not match the domains the telecoms companies actually used, the filings said.
All 16 confirmation emails that HPS received “had some significant indicia of fraud”, the lender said in its filings. Five telecoms companies confirmed that the email addresses are not associated with them, it said.
The discovery cast “serious doubt on whether the receivables . . . ever existed”, HPS said. “If the receivables . . . were fabricated and never existed, then [the HPS funds] have been left entirely unsecured.”
HPS’s filings said it had “conducted comprehensive due diligence” in 2020 when it first financed the companies and had brought in third-party experts to audit the receivables every year.
Of the $430mn that HPS extended to the Brahmbhatt entities, about half was financed using leverage provided by BNP Paribas, a person with knowledge of the matter said. BNP declined to comment.
After discovering the alleged problems with the documentation, the HPS funds contacted an unnamed person believed to be a “close associate” of Brahmbhatt, they said in their filings.
This person told them Brahmbhatt’s explanation for the email domains was that telecoms groups use different domains for different business units. The person later said Brahmbhatt explained that telecoms companies had changed their email domains as a result of security breaches in the industry, the filings noted.
HPS has hired law firm Quinn Emanuel to fight the case, according to the August filing. Brahmbhatt is believed to have a residence in Long Island, New York, it said, but “remains overseas”.
Additional reporting by Sarah White in Paris
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