Michael Winans, Jr., Member of Famous Gospel Music Family, Pleads Guilty to $8M Ponzi Scheme
Maryland Resident Pleads Guilty to Fleecing Investors in $8M Ponzi Scheme Using Bogus Oil Bonds
Michael Winans, Jr., a member of Detroit’s famous gospel music family and a current resident of Jessup, Maryland, has pled guilty to defrauding more than 1,000 investors out of $8 million in an investment scheme that involved crude oil bonds. The plea was entered in federal court in Michigan earlier this week. Victims of the fraud were located in several states.
According to court documents, Winans began his investment scheme by recruiting eleven “shareholders” to invest in the Winans Foundation Trust. Shareholders were told that the trust would invest the funds in crude oil bonds in Saudi Arabia, which would render guaranteed returns of $1,000 to $8,000 within 60 days.
To invest, Winans required the initial “shareholders” to solicit investments from additional investors and to send the new investors’ funds to the trust. Together, Winans and his shareholders persuaded more than 1,000 investors in several states to invest more than $8 million.
Despite Winans’ representations, he never had any intention of investing the funds as promised. In fact, the Saudi Arabian crude oil bonds didn’t even exist. Instead, Winans used some of the money to pay “returns” to earlier investors and took the remainder for his personal use.
Winans’ sentencing is scheduled for Feb. 27, 2013 before the Honorable Sean F. Cox in Michigan. He faces a potential 20 years in prison. For additional information, click here.