 "An Indian-origin CEO has been implicated in a $500 million scam that allegedly targeted the world’s largest investment firm, BlackRock. (Reuters)")
An Indian-origin telecom executive, Bankim Brahmbhatt, has been accused of running a $500 million fraud that targeted BlackRock’s private-credit investing arm, HPS Investment Partners, and several other lenders, according to a report by the Wall Street Journal on Thursday.
The report stated that HPS Investment Partners, acquired earlier this year by BlackRock, is now attempting to recover the funds after describing the incident as a “breathtaking” fraud. Brahmbhatt, the owner of US-based Broadband Telecom and Bridgevoice, allegedly fabricated accounts receivable that were pledged as collateral for loans.
A lawsuit filed in August claims HPS had extended loans to Brahmbhatt’s companies on the condition that customer payments would secure the borrowing. The lenders now allege that Brahmbhatt’s firms owe them more than $500 million. BlackRock has further alleged that during the verification process, it was discovered that loan proceeds had been diverted to offshore accounts in India and Mauritius.
Sources cited by the WSJ reported that BNP Paribas helped finance the loans made by HPS to Brahmbhatt’s companies. HPS began lending to one of Brahmbhatt’s affiliated entities in September 2020, later increasing its total exposure to around $385 million in early 2021 and approximately $430 million by August 2024. Nearly half of the loan amount was reportedly financed by BNP Paribas.
Since the case was filed, several firms linked to Brahmbhatt, including New York-based invoice financing company Carriox Capital, have filed for Chapter 11 bankruptcy protection in the US.
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The lenders’ lawsuit accuses Brahmbhatt of creating fraudulent invoices, contracts, and emails over a two-year period to make it appear that major telecom firms owed his companies money. “Brahmbhatt created an elaborate balance sheet of assets that existed only on paper,” lawyers for the lenders wrote in court documents.
In July, an HPS employee reportedly discovered irregularities involving email addresses claimed to be from Carriox clients, prompting questions to Brahmbhatt. He initially denied any wrongdoing but later stopped responding to calls. When HPS staff visited his New York office in Garden City, the premises were closed.
By Wednesday, the office suite remained locked and vacant, and no one answered the door at his listed residence nearby. Several luxury vehicles, including two BMWs, a Porsche, a Tesla, and an Audi, were seen parked in the driveway, with an unopened package at the door.
HPS has reportedly told clients it believes Brahmbhatt is now in India.
Brahmbhatt, the founder of Bankai Group, has spent over three decades in the telecom industry through companies such as Broadband Telecom and Bridgevoice, which provide infrastructure and services to telecom operators.