Michael Winans Jr.: Ponzi Scheme, Guilty Plea, and 14-Year Sentence

Michael Winans Jr., a third-generation member of Detroit’s Grammy-winning Winans gospel family, ran a Ponzi scheme between 2007 and 2008 that defrauded more than 1,000 investors of roughly $8 million by selling nonexistent Saudi Arabian crude oil bonds through church networks. He pleaded guilty to wire fraud in October 2012 and was sentenced on February 27, 2013, to 13 years and 9 months in federal prison, plus about $4.8 million in restitution to 612 identifiable victims and a $175,000 fine.¹

How the Scheme Worked

Winans created an entity called the Winans Foundation Trust and told investors it existed to purchase crude oil bonds in Saudi Arabia. The bonds did not exist, and Winans knew they did not exist.¹ He promised investors 100 percent returns within two months and pitched the opportunity as a guaranteed path to wealth.²

The structure ran on recruitment. Winans designated an initial group of 11 individuals as “shareholders” and required them to solicit additional investors and funnel money into the trust.¹ One recruiter’s team alone brought in more than 350 investors and roughly $2 million.³ Money from new investors paid returns to earlier ones or was diverted to Winans’s personal expenses, in classic Ponzi fashion. As part of his plea, Winans admitted that he kept collecting money from investors even after he knew the bonds were fraudulent.²

How Church Communities Were Targeted

Winans promoted the investment from church pulpits and at church-hosted seminars, using the Winans family’s gospel-music reputation to establish credibility.² At one seminar, he reportedly asked the audience, “Would I be using this forum if I wasn’t being truthful with you?”³

Seminars were held at locations including the New Genesis Beginnings Church in Detroit, and the fraud’s reach extended well beyond Michigan. Detroit Police Inspector Maurice McClure said one report involved a church as far away as Alaska. Jason Moon, a spokesman for the Michigan Office of Financial and Insurance Regulation, said Winans “used the family name and connections in the Detroit religious community to prey on church members.”⁴

One victim, Ameer El, said he “had faith in the Winans name” and that the church setting made the pitch feel legitimate. He accused the perpetrators of having “used the Bible and the church to disguise their schemes.”⁴ The friend-of-a-friend networks inside congregations became the infrastructure that let the scam spread quickly. It is a textbook example of affinity fraud, where shared identity and trust suppress the skepticism that might otherwise protect potential victims.

Charges, Guilty Plea, and Sentence

State regulators first identified the scheme in 2008. A joint investigation followed, conducted by the FBI, the Wayne County Prosecutor’s Office, and the Michigan Department of Licensing and Regulatory Affairs, Office of Financial and Insurance Regulation.¹ On September 10, 2012, a federal fraud indictment was filed in the U.S. District Court for the Eastern District of Michigan, charging Winans with one count of wire fraud (Case No. 2:12-cr-20598).⁵ He pleaded guilty in October 2012. The plea agreement waived his right to appeal his sentence and committed him to pay restitution to every identifiable victim.⁶

On February 27, 2013, U.S. District Judge Sean Cox imposed the 13-year, 9-month sentence, within the guideline range of 12.5 to 15.5 years that prosecutors had recommended.⁷ The $175,000 fine was the maximum permitted by law.⁸

Judge Cox reviewed more than 50 victim impact letters and heard from two victims at the hearing. He called the case “very, very troubling” because Winans had committed “fraud on good, decent church-going people” and had “used churches to perpetuate this fraud.”⁷ As a longtime churchgoer himself, Cox said, Winans “knew right from wrong.”⁹ U.S. Attorney Barbara McQuade called the scheme “just a fancy way to steal other people’s money.”¹⁰

Winans addressed the court and said he wanted “to apologize to everyone,” describing his decisions as “negligent and irresponsible.” He said he had no “malicious intent” and “wanted people to have a good life,” while acknowledging “mistakes” that caused “financial and emotional damage.”²

The Failed Appeal

Winans was ordered to report to prison on May 9, 2013. Before that date, he moved for a 60-day delay, arguing that his losses should be pegged at $1.2 million rather than $8 million and blaming “wrong calculations” by his former attorney and “middlemen” he said had kept some investor funds. Judge Cox denied the request.¹¹

Despite the appeal waiver in his plea, Winans challenged his sentence before the U.S. Court of Appeals for the Sixth Circuit. He argued that the waiver did not cover the restitution order and that the district court had exceeded its authority under the Mandatory Victims Restitution Act by ordering restitution to 612 victims when his single wire fraud count named only two.⁶

On March 17, 2014, the Sixth Circuit dismissed the appeal in United States v. Winans, 748 F.3d 268. The court held that the appeal waiver was knowing and voluntary and that it covered the restitution order because restitution is part of a criminal sentence. Even without the waiver, the court found the restitution order complied with the statute, which permits restitution for all persons harmed by conduct that was part of the defendant’s scheme; the plea agreement itself had broadened restitution to cover every identifiable victim.¹² Ineffective-assistance-of-counsel claims Winans raised were left for a separate collateral proceeding.⁶

What Victims Lost

More than 1,000 investors across multiple states put money into the scheme. By the time of sentencing, roughly 600 people were still owed a combined $4.8 million.² Some lost their homes.⁴ Others described life savings wiped out, marriages that fell apart, and money set aside for children’s college educations that simply vanished.

1
U.S. Department of Justice. Maryland Resident Sentenced to 14 Years in Prison for $8 Million Ponzi Scheme
2
Christian Science Monitor. Michael Winans Jr, Gospel Family Scion, Gets Nearly 14 Years in Prison
3
WDIV ClickOnDetroit. Victims of Michael Winans Jr’s Ponzi Scheme Urge Judge to Dish Harsh Sentence
4
WoldCNews. Winans Family Member Implicated in Investment Scam
5
CourtListener. United States v. Winans
6
Midpage. United States v. Michael Winans, 748 F.3d 268
7
USA Today. Grammy Nominee Winans Prison Fraud Scheme
8
FBI. Maryland Resident Sentenced to 14 Years in Prison for $8 Million Ponzi Scheme
9
Michigan Chronicle. Michael Winans Jr Sentenced to 13 Years in Prison for Ponzi Scheme
10
MLive. Member of Detroits Famed Winans Family Sentenced
11
CBS News Detroit. Winans Scion Fails to Get Fraud Sentence Delayed
12
U.S. Court of Appeals for the Sixth Circuit. United States v. Winans, No. 13-1311