Here's a release from the FBI:

Two Boston-area hedge fund managers pleaded guilty today to conspiring to mislead investors into investing more than $500 million in their fraudulent hedge fund business.

Gabriel Bitran, 69, of Newton, a former professor and associate dean of the Massachusetts Institute of Technology (MIT) Sloan School of Business, and his son Marco Bitran, 39, of Brookline, a Harvard Business School graduate and money manager, pleaded guilty to conspiracy to commit securities fraud, wire fraud and obstruction of justice in connection with their hedge fund businesses, GMB Capital Management and GMB Capital Partners. U.S. Senior District Judge Mark L. Wolf deferred a determination as to whether he will accept the plea until the time of sentencing which is scheduled for March 27, 2015.

“This office continues to pursue complex white-collar crimes no matter who the perpetrator,” said United States Attorney Carmen M. Ortiz. “No one is above the law. Here, a highly respected MIT professor and his well-educated son used their connections to lure investors into a scam which ultimately lost more than $140 million.”

“Gabriel and Marco Bitran cheated their victims out of hundreds of millions of dollars of their retirement money and savings by lying to them over and over again and claiming false returns and profits. Today’s guilty plea is a significant step in our ongoing effort to bring justice to victims of investment fraud. The FBI and our law enforcement partners will keep exposing those responsible for these crimes as long as innocent people are cheated out of their hard earned money,” said Vincent B. Lisi, Special Agent in Charge of the Boston Division of the FBI.

“Investment returns that seem too good to be true – such as those offered by the Bitrans –should be a signal to investors to stay clear” said Special Agent in Charge William P. Offord of IRS Criminal Investigation. “Today’s guilty pleas demonstrate our collective efforts to ensure that the financial services industry will not be used for unlawful personal gain, but will be operated in a fair and honest manner to promote the public interest.”

As set forth in the Information to which the they pleaded guilty, from 2005 through 2011, Gabriel and Marco Bitran solicited and maintained investors in their hedge fund and investment advisory businesses through false claims that, for eight or more years, they had managed friends and family funds, delivering average annual returns between 16 and 23%, with no down years. The Bitrans falsely told investors that the money in GMB hedge funds would be invested according to a complex mathematical trading model developed by Gabriel Bitran and based upon his MIT research on optimal pricing theory. The Bitrans also routinely concealed from investors that certain of their hedge funds were simply “funds of funds,” that is, hedge funds in which values of investments are determined by the value of investments in other independently managed hedge funds, some of which were themselves broad-based funds of funds.