BlackRock duped into loaning $430M to telecom entrepreneur who allegedly faked invoices. How to avoid a similar scam

BlackRock, the world's largest plus manager (1), precocious shared it lent much than $430 cardinal done its backstage recognition arm, HPS Investment Partners, to a radical of companies present nether probe for fraud.

It lent the wealth based connected collateral that whitethorn not person ever existed — invoices that allegedly showed the radical of borrowers were owed millions successful receivables by large telecom groups.

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The Department of Justice has since launched an probe into these invoices and entities tied to enforcement Bankim Brahmbhatt (2).

Earlier successful 2025, a tribunal filing accused Brahmbhatt and his companies of "an extraordinarily brazen and wide fraud," alleging the invoices utilized to verify the receivables were fabricated.

This caller filing highlights a troubling inclination affecting ample firms and mundane Americans alike: The Federal Trade Commission precocious reported that Americans mislaid $12.5 cardinal to fraud successful 2024, a 25% summation from the erstwhile twelvemonth (3).

According to Reuters, HPS began lending to companies tied to Brahmbhatt successful 2020, based connected receivables the firms claimed were owed to them. But tribunal filings assertion those documents were fabricated — meaning the purported gross whitethorn ne'er person existed.

This benignant of strategy is often called receivables fraud oregon invoice fraud.

In elemental terms, a borrower claims that customers beryllium them wealth for services rendered oregon erstwhile purchases, thereby artificially inflating the borrower’s value.

A lender past agrees to beforehand currency based connected those outstanding invoices. If the invoices are fake oregon inflated, the lender is efficaciously lending against non-existent revenue.

Private credit, wherever plus managers lend straight to companies extracurricular accepted banks, has grown rapidly successful caller years. Many of these loans trust heavy connected documents specified arsenic invoices and accounts receivable arsenic collateral. If that paperwork is falsified, the full woody tin rapidly unravel, leaving the borrower with imaginable losses (4).

And if a planetary plus manager with compliance teams, owed diligence resources and extracurricular auditors tin allegedly beryllium duped successful this way, smaller lenders and mundane concern owners whitethorn beryllium adjacent much susceptible to specified fraud.