Question #a0669
2 Answers
What is occurring is the conversion of gravitational potential energy that is already possessed by the objects into kinetic energy. Energy is transformed from one form to another, but none is created.
This is a bit mean. It relies on a misconception about energy.
Explanation:
You naturally assume the object falling starts off with no energy, but it does. All that happens is that it loses GPE as it gains KE. There is no violation of conservation laws, just a different view of where the zero point in energy lies.
Think of it as being zero GPE at infinite distance from the black hole, with the energy being below zero the closer you get and the problem disappears. Here the black hole is at the centre of the potential well.
A diagram may help to visualise it:
Taken from: 
