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Bailey McCann, Opalesque New York:

Former MIT professor Gabriel Bitran, and his son Marco Bitran of GMB Capital Management and GMB Capital Partners will now face charges from federal prosecutors that they engaged in conspiracy to commit securities fraud, wire fraud and obstruction of justice in connection with their hedge fund businesses, according to a complaint. The documents released today in Boston came as a result of the ongoing investigation in the Madoff Ponzi scheme.

The men raised more than $500 million for the fund through 2011, and fed the Madoff scheme through a fund of funds investment. Despite facing significant losses of $140m, both men continued to tout their success to investors. They also paid themselves millions in management fees.

Prosecutors also allege that both men attempted to hide assets from SEC investigators by transferring them under the name of a family member who was unaware of their activities. Both men will plead guilty and could face up to five years in prison, according to a Bloomberg report.

Both men previously settled with the SEC by paying fines for lying to investors in 2012. Emails made public by the US Attorney's Office include one comment from the elder Bitran - "We have mislead a lot of people with a range of statements that were incorrect simply to increase our income."

Both men ar......................

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