Monday, March 4 2013 12:37 PM EST2013-03-04 17:37:11 GMT
This week, pop and gospel singer Michael Winans, Junior will be sentenced for running a multimillion dollar Ponzi scheme.
He used to hang out with big time celebrities, but soon Michael Winans, Junior will likely be hanging around with federal inmates. This week, the pop and gospel singer will be sentenced for running a multimillion dollar Ponzi scheme.
Churchgoers throughout Detroit say they were offered an investment idea by their pastor, but what sold them was a pitch by Mike Winans, Junior. Now, star struck investors say a trusted member of a famous gospel singing family tricked them out of their money. See what happens when Rob Wolchek pays this popular vocalist a visit.
This story was first published in 2009. A second Rob Wolchek video report was added to the player above the week Michael Winans Junior was sentenceenced in February 2013.
UPDATE ON FEBRUARY 27:
A judge sentenced a member of gospel music's Winans family
to nearly 14 years in prison Wednesday for an $8 million financial scam
that was promoted in church pulpits.
Two of Michael Winans Jr.'s
victims spoke in federal court, telling a judge 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.
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, 30, is a
third-generation member of one of gospel music's first families. He's
the grandson of Delores "Mom" Winans and David "Pop" Winans Sr., and the
son of Michael Winans Sr., a member of The Winans, a quartet of
brothers. His uncle, Marvin Winans, gave the eulogy at Whitney Houston's
funeral.
Winans has performed with his cousins as Winans Phase II. He released his own album in 2011, "My Own Genre."
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.
"Fraud on good, decent church-going people -- that was very, very troubling to me," Cox said.
Cox chose a sentence that was in the guideline range of 12 1/2 years to 15 1/2 years in prison.
"Investor fraud schemes like this one are just a fancy way to steal other people's money," U.S. Attorney Barbara McQuade said.
