Two former hedge fund managers were sentenced to 45 months in prison, for misleading investors into investing more than $500 million in their fraudulent hedge fund business, said the U.S. Attorney's Office on Wednesday.

Gabriel Bitran, 70, a former professor at the Massachusetts Institute of Technology and his son Marco Bitran, 40, a Harvard Business School graduate, were also sentenced on Monday to three years of supervised release, forfeiture and restitution of more than $11 million by a U.S. District Court. (

The Bitrans agreed last year to plead guilty to criminal charges that they lied about their investment record. (

The men founded hedge fund GMB Capital Management in 2005 and raised more than $500 million from wealthy investors who wanted a piece of the MIT's professor's exclusive computer models, which the pair falsely said had never suffered a down year and delivered double-digit returns ranging between 16 percent and 23 percent.

But instead of investing the money themselves, the Bitrans put it with others, including Tom Petters' and Bernard Madoff's frauds.

At the height of the financial crisis when several of the Bitrans' funds plunged in value in the fall of 2008, the pair pulled roughly $12 million of their own money out but left their investors stuck in tumbling investments.

United States Securities and Exchange Commission learned of the Bitrans' performance claims in January 2009 while investigating potential victims of the Madoff fraud and asked for supporting documentation.

The Bitrans lost more than $140 million of GMB investors' principal.