Gospel Singer Michael Winans Jr. Sentenced to 14 Years in Prison for $8 Million Fraud
A judge has sentenced a member of gospel music’s Winans family to nearly 14 years in prison for an $8 million ponzi scheme that was promoted and target to church members in their churches.
The federal court was told that the scheme to sell Saudi Arabian oil bonds robbed some people of their life savings, caused divorces and fractured many families.
“I want to apologize to everyone. … These were decisions that were negligent and irresponsible,” said Winans, of Jessup, Md.
He said he had no “malicious intent” but acknowledged that he continued to collect money even after he learned that the bonds were bogus.
My Fox Detroit reported:
Winans attracted more than 1,000 investors in 2007 and 2008, although he didn’t know them all because many were recruited by others through word of mouth. He promised 100 percent returns in two months, then used the money for personal expenses or to pay off earlier investors. About 600 people are still owed $4.7 million.
Winans relied on unwitting friends to round up investors, a trait of a classic Ponzi scheme. When the bonds turned out to phony, investors angrily turned on the people who recruited them.
“There are lots of marriages that have been destroyed. I know family members who aren’t speaking to each other,” Tara Hurt told the judge. The Detroit-area resident declined further comment outside court.
U.S. District Judge Sean Cox read from some of the 50 letters written by victims. He said a young woman joined the Army because her family had lost money that was intended for her college education. He noted that Winans made his pitch from church pulpits.
A letter from one of the recruiters who brought hundreds of investors into the scheme read:
“My team and I alone had more than 350 people totaling $2 million. As a result, many people, such as myself, has to file bankruptcy. Marriages split apart. Families were divided. Friendships ended. People became physically ill due to stress and lack of finances.”
Another letter read:
“This silver-tongued con man used his family name to give us a false sense of trust, that he was an upstanding person. 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?’”