A hedge fund manager in California has admitted using a Ponzi scheme to defraud investors of around $44 million while claiming annual returns of as much as 60 per cent, according to media reports.

Bradley Ruderman, founder and manager of Ruderman Capital Partners, surrendered to federal agents in May. He has now pleaded guilty to two counts of wire fraud and two counts of investment advisor fraud.

Prosecutors said Mr Ruderman accepted $44.3 million over eight years from 22 investors, mainly family members. In April 2009, he wrote to them saying the money was almost gone.