According to Myfoxdetroit.com, Michael
Winans Jr., whose father is Michael Winans Sr. of the famous gospel group The
Winans, was sentenced to 14 years in prison on March 6th, 2013, in connection
with an $8 million Ponzi scheme.
"I want to apologize to everyone. ... These were decisions that were negligent and irresponsible,' said Winans, of Jessup, Md. [Winans] said he had no "malicious intent" but acknowledged that he continued to collect money even after he learned that the bonds were bogus."
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.
Winans, 30, attracted more than
1,000 investors between 2007 and 2008 by promising 100 percent returns in two
months for investing in a Saudi Oil bond. He then used the money for personal
expenses or to pay off earlier investors. Most of the investors were not
recruited directly by Winans. Many were recruited by others through word of
mouth.
"[He] 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.... About 600 people are still owed $4.7 million."
Winans [] has performed with his cousins as Winans Phase II. He released his own album in 2011, 'My Own Genre.'
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 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.
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