BRIDGEPORT -- The wealthy owner of a group of Stamford-based hedge funds pleaded guilty Monday to five federal charges involving the misuse of hundreds of millions of dollars of investors' money.

Francisco Illarramendi, who owns and operates the Michael Kenwood Capital Management Group, pleaded guilty to charges of wire, securities and investment advisor fraud as well as conspiracy charges during his appearance before U.S. District Judge Stefan R. Underhill. The charges carry a total maximum sentence of 70 years in prison, more than $5 million in fines, forfeiture of illegally obtained goods and restitution to victims.

Assistant U.S. Attorney Paul Murphy said Illarramendi used money from new investors to pay promised returns to old investors.

This type of payoff is similar to the Ponzi scheme that landed Bernard Madoff, the New York financial adviser who stole billions from investors, in federal prison for 150 years.

Illarramendi, 42, of New Canaan, was released on bond that involved his posting ownership in his New Canaan home, an apartment in New York City and two condominiums in Bethesda, Md. The FBI and the Securities and Exchange Commission are continuing their investigation into Michael Kenwood group, which operated several hedge funds including the Short Term Liquidity Fund, MK Venezuela Ltd. and MK Special Opportunities Fund.

Between 2005 and 2006, Murphy said, the funds lost millions of dollars. But rather than disclose the losses, Illarramendi intentionally concealed them through fraudulent documents and statements, Murphy said. He also commingled individual fund investments in order to provide returns to some investors who chose to close out their investments in a fund, prosecutors said.

In 2008 Illarramendi created a false letter from an investment bank that claimed to acknowledge a $30 million line of credit, prosecutors said.