A hedge-fund manager is seeking to return funds to clients amid accusations that he misled investors, according to a lawsuit against him, as well as due to information from unnamed sources cited by the Wall Street Journal.

Robert Duncan, who posted years of solid results, continuing even during the turbulent fourth quarter of 2008, admitted to two of his investors that he had been faking his performance numbers since at least 2006, according to a complaint filed in court last Friday and people familiar with the situation, the publication said.

Victims in the case, according to the complaint, include an Atlanta trust and two well-known Atlanta investment managers who had invested client money with Duncan and his fund, Seaside Partners Fund LP.

The credit crunch has brought to light a number of alleged and actual financial wrongdoings, most notoriously that of Ponzi scheme fraudster Bernard Madoff, now jailed for life.

According to a person familiar with the case, Mr. Duncan gave clients auditing records purportedly provided by an accounting firm. This person contends that Mr. Duncan forged those statements.

The WSJ said the fund was believed to have about $20 million in assets and, which is relatively modest by the standards of today’s hedge fund sector.