Thursday, March 4, 2010

Winans Family Members Ran $11 Million Ponzi Scheme

Michigan state regulators says they've uncovered a massive multi-million Detroit-area Ponzi scheme involving members of the Winans gospel music family.

Officials at the Office of Financial and Insurance Regulation (OFIR) allege that Michael Winans Jr. (pictured) was the ringleader, running a ponzi scheme that scammed investors out of millions of dollars by promoting fraudulent Saudi Arabia oil bonds. His father, Michael Winans Sr., was also involved in the scheme that is believed to have ended in 2008.

Investigators say Michael Jr. used the family name and connections in the Detroit religious community to and prey on church members at Genesis New Beginnings Church in Detroit and others through a fraudulent crude oil bond investment program. OFIR determined the individuals were not licensed to sell securities products in Michigan and the products sold were not registered with the state.

Michael Jr. allegedly told investors that he had crude oil bonds in Saudi Arabia, and if they invested anywhere from $1,000 to $7,000 with them, they would double their investment. Investors were reportedly assured there was no risk.

During the 14-month investigation, the Detroit Police interviewed more than 180 victims who invested nearly $2.6 million in the scheme. The actual number of victims is estimated to be much higher and the amount of money investors lost in the scheme could be as high as $11 million.

Also implicated are Winans Jr.'s subordinates Desmond Weems, Latonya Garth and Michael Winans Sr., and a number of related business entities that OFIR says violated the state’s Uniform Securities Act.

The agency ordered them to cease and desist from the sale of unregistered securities products. All of their bank records and evidence in the case has been turned over to local prosecutors.

Michael Sr. was a member of The Winans. BeBe and CeCe are his siblings.

Here's the state's case against the Winanses. (Someone is going to prison!)

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Joann said...

WOW...You got to be kidding me.

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