BlackRock was duped into loaning $430M to a telecom entrepreneur allegedly using fake invoices as collateral. How a similar scam could impact you

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

Earlier in 2025, a court filing accused Brahmbhatt and his companies of "an extraordinarily brazen and widespread fraud," alleging the invoices used to verify the receivables were fabricated.

This new filing highlights a troubling trend affecting large firms and everyday Americans alike: The Federal Trade Commission recently reported that Americans lost $12.5 billion to fraud in 2024, a 25% increase from the previous year (3).

Why BlackRocks' losses matter to consumers and smaller businesses

According to Reuters, HPS began lending to companies tied to Brahmbhatt in 2020, based on receivables the firms claimed were owed to them. But court filings claim those documents were fabricated — meaning the purported revenue may never have existed.

This type of scheme is often called receivables fraud or invoice fraud.

In simple terms, a borrower claims that customers owe them money for services rendered or previous purchases, thereby artificially inflating the borrower’s value.

A lender then agrees to advance cash based on those outstanding invoices. If the invoices are fake or inflated, the lender is effectively lending against non-existent revenue.

Private credit, where asset managers lend directly to companies outside traditional banks, has grown rapidly in recent years. Many of these loans rely heavily on documents such as invoices and accounts receivable as collateral. If that paperwork is falsified, the entire deal can quickly unravel, leaving the borrower with potential losses (4).

And if a global asset manager with compliance teams, due diligence resources and outside auditors can allegedly be duped in this way, smaller lenders and everyday business owners may be even more vulnerable to such fraud.

But invoice fraud doesn’t only impact lenders. Small businesses can fall victim to invoice fraud in other ways when:

• Vendors submit fake invoices hoping they’ll be paid without review.
• Employees create shell vendors and route payments to themselves.
• Borrowers inflate income or fabricate contracts to secure loans.
• Contractors exaggerate receivables to qualify for more favourable loan terms.

As AI tools make document manipulation easier, this type of fraud is likely to only grow.

Fake invoices, altered bank statements and made-up contracts can now look convincingly real.

For small landlords, small businesses and local lenders, the risk can be even higher because they lack sophisticated fraud-detection tools that larger companies can access.

How to protect yourself from fake invoice fraud

Fraud tied to fake invoices is a risk whenever money changes hands.

Whether you’re a small-business owner, landlord, contractor, or borrower, protecting yourself starts with understanding how easily documents can be manipulated.

Here are practical ways to reduce your risk:

Implement dual controls

Separate those who approve invoices from those who process payments.

Even in very small businesses, adding a second layer of review can significantly reduce the risk of fraud (5).

Watch for pressure tactics

Fraudsters often try to create urgency with phrases like “payment due immediately” or “account will be closed today.”

Slow down and verify invoices are accurate before sending funds — and train your team to do the same.

Audit receivables and vendor lists regularly

Periodic reviews can uncover duplicate invoices, unfamiliar vendors, or unusual patterns you may not have noticed.