Memeber of Winans Family Sentenced Nearly 14 Years For Ponzi Scheme

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Via: International Business Times

Michael Winans Jr., a 30-year-old gospel singer from the famous Winans family, was sentenced to nearly 14 years in prison  Wednesday for running a Ponzi scheme that ripped off more than 1,000 investors for a total of $8 million.

Although prosecutors recommended a sentence of only 12 and a half years, U.S. District Judge Sean F. Cox in Detroit sentenced Winans to 165 months in prison (almost 14 years), telling the court that the defendant’s scheme had more than just financial repercussions.

“This didn’t just impact people’s pockets,” Cox said, according to the Detroit News. “Families broke up. The defendant would have people recruit other people for him. When this came out as a fraud, (investors) were not only upset with the defendant; they became upset with the people they gave money to.”

Federal prosecutors said Winans exploited religion and his family name to sell investors fake Saudi Arabian oil bonds between 2007 and 2008, promising them 100 percent returns on their investments if they left their money in his hands for two months. Like dime-store Bernie Madoff, the “silver-tongued con man,” as one victim called Winans, used incoming money to pay off earlier investors.

Tara Hurt, one of Winans’ clients, testified that her mother died shortly after being swindled. “Myself and my husband have experienced turmoil for the past five years. … My mother passed away without ever recovering the money she thought would help her,” Hurt said.

“Marriages have been ruined,” she added. “My marriage was almost ruined as well. Family members aren’t speaking to other family members because of this.”

According to a source, Winans claimed in court that his scheme to sell oil bonds wasn’t initiated with “malicious intent.” He told the court that he hadn’t known the investment scheme was a scam at first, but admitted that he didn’t alert investors once it became apparent to him.

Two of Winans’ duped clients told the court that the fraudulent scheme resulted in divorces, and cost people their life savings. In a letter, one the associates who recruited hundreds of investors into Winans’ racket testified that the ruse had led families to financial ruin, breaking many apart in the process.

“My team and I alone had more than 350 people totaling $2 million. As a result, many people, such as myself, had to file bankruptcy. Marriages split apart. Families were divided. Friendships ended. People became physically ill due to stress and lack of finances,” the recruiter wrote.

“This silver-tongued con man used his family name to give us a false sense of trust, that he was an upstanding person,” another former client wrote. “[He] even went so far as to stand up in front of a church and say, ‘Would I be using this forum if I wasn’t being truthful with you?’”

The Winanses are one of the “first families” of gospel; Michael’s uncle, Marvin Winans Sr., eulogized Whitney Houston at her funeral. The 30-year-old previously performed with some of his cousins in a group known as Winans Phase II, and even released his own R&B album “My Own Genre” in 2011.

Winans formally apologized for his actions in front of a Detroit court on Wednesday, but maintained that his actions had begun in good faith.

“I want to apologize to everyone,” Winans told the court. “These were decisions that were negligent and irresponsible.”

Winans went on to argue that in spite of his negligence, “there was zero malicious intent on my part.”

“This investment was presented as a good thing to me, and I wanted people to have a better life,” he told Cox.

The judge, however, did not wholeheartedly accept Winans’ explanation, countering, “You may have believed this was a legitimate investment in the first few months, but when you found out it wasn’t, you continued the scam.”

Cox will recommend that Winans serve out his prison sentence at a facility near his home in Maryland, as per the defense’s request. Until a location is picked, Winans is allowed to remain free on bond.

 

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