Five Lancelot Investment Management hedge funds have filed for bankruptcy, blaming Minnesota businessman and hedge fund manager Tom Petters, who is accused of orchestrating one of the largest Ponzi schemes in history.

The five Lancelot funds and their subsidiaries filed for Chapter 7 liquidation in U.S. Bankruptcy Court in Chicago last week. According to court documents, the funds invested about $1.5 billion of their $1.8 billion in assets in Petters' business entities, which, in addition to his hedge funds, include Polaroid and Sun Country Airlines.

In an e-mail to investors, Lancelot President Gregory Bell said that the funds were forced to file for bankruptcy because its creditors won't release their assets.

"We are disappointed by the massive fraud perpetrated by Petters Co. has now claimed our funds, and each of our investors, as is victims," Bell said.

Petters is accused of defrauding victims of some $3 billion, and faces federal charges of mail and wire fraud, money laundering and obstruction of justice.