Washington, Aug 24 (IANS) An Indian father and son who ran two small hedge funds catering to Silicon Valley Indian professionals are facing a lawsuit by angry investors alleging the two hid big losses in 2008.

The lawsuit alleges Vishwas Godbole, 64, told investors in 2008 that the funds were withstanding the financial crisis, but a year later he told them the funds' value had actually dropped by a combined $18 million, according to mercurynews.com, a news site that focusses on Silicon Valley.

Started as a small investment fund for Godbole and a few close friends, it had grown to about 150 investors with $90 million in two separate funds, Opulent and Opulent Lite by 2008. The investors were valley professionals, graduates of India's top tech schools and people who came from the same region in western India.

Most of the more than 50 plaintiffs in the lawsuit were investors in Opulent Lite. The suit alleges a "systematic and organized family scheme" to conceal losses and overcharges on fees. It was filed last year in San Francisco Superior Court and is now in arbitration.

Godbole called the allegations against him and his family "absurd and false" and said the lawsuit is mainly directed at Opulent Lite, the fund run by his son Neil. The younger Godbole declined to comment, mercurynews.com said.

Ramesh Sarva, a New York accountant who examined the books for the Godboles' lawyers, rejected the lawsuit's charge about fees, saying the Godboles didn't end up with "one penny" more than was due them, the website said.

Vishwas Godbole retired from the tech business in 2001 after 25 years in Silicon Valley companies. An IIT Bombay engineering graduate, he has several patents, including one for the fax modem.

He co-founded one company, Navin Communications, which had several prominent investors including Sabeer Bhatia, a founder of Hotmail, an e-mail service that Microsoft later bought.

After several years of statistically analysing the major index funds, Godbole founded Opulent Fund in 2001. Opulent Lite, for a less wealthy tier of investors, was launched in 2004.

Neil Godbole, now 29, began directing Opulent Lite's investments in 2005 after a stint at Google. A 2002 University of California, Los Angeles, graduate in cognitive science and an amateur musician, Neil has written that he picked up his investment know-how from his father.