James G Marquez, who helped to establish the Connecticut-based Bayou Fund LLC and Bayou Fund, could face up to five years in prison as well as fines and restitutions of $6.25 million along with forfeiture of any gains.
Mr Marquez admitted to submitting fake audits which led to the collapse of the fund in 2005.
Following the collapse of the Bayou Fund, over $100 million was seized by authorities and returned to victims of the fraud and the Connecticut Department of Banking established a specialist unit to oversee hedge funds.
Mr Marquez had worked with Samuel Israel and Daniel Marino, who last year pleaded guilty to fraud and conspiracy charges and are currently awaiting sentencing.
The case centers on the creation of a fake accounting firm that signed off fake financial statements.