DETROIT (CBS Detroit) A member of Detroit’s famous Winans gospel music family — Michael Winans Jr., 30, who now lives in Jessup, Maryland — pleaded guilty Wednesday to federal charges. Winans is the nephew of  Marvin Winans, who gave the eulogy at Whitney Houston’s funeral.

Winans was charged with defrauding investors out of approximately $8 million dollars, United States Attorney Barbara McQuade announced.

Here’s how investigators said the scheme worked: Winans represented the Winans Trust as a company investing in crude oil bonds in Saudi Arabia. Winans initially recruited 11 people, whom he called “shareholders” in the Trust, to invest in the crude oil bonds. Winans required the “shareholders” to solicit additional investors and send the investors’ funds to the Trust.

Over 1,000 victim investors from several states sent over $8 million to the Trust. All of these victims were led to believe they were investing in Saudi Arabian crude oil bonds that Winans well knew did not exist. Winans guaranteed the victim investors that the bonds would yield returns of $1,000 to $8,000 within 60 days.

“In reality, Winans converted some of the victim investors’ money to his own personal use while giving some of his later victims’ money to his earlier victims, and falsely represented to them that it was the return on their “investments” he had promised,” investigators said in a press release.

“Investor fraud schemes like this one are just a fancy way to steal other people’s money,” McQuade said. “Anyone who robs citizens of their hard-earned savings will be brought to justice.”

Wayne County Prosecutor Kym Worthy, who was involved in the investigation, said, “Winans has allegedly fleeced many innocent people and betrayed their trust. This is a significant step in bringing justice to his many victims.”

Winans sentencing has been set for 2 p.m. Feb. 27, 2013 before the Honorable Sean F. Cox at which time he could face a statutory maximum penalty of 20 years in prison.

This case was a joint investigation with the FBI, the Wayne County Prosecutor’s Office and the Michigan Department of Licensing and Regulatory Affairs, Office of Financial and Insurance Regulation (OFIR).
The case is being prosecuted by Assistant United States Attorney Abed Hammoud.

Anyone who believes they may have been a victim of the Winans Foundation Trust should provide their
name, address, phone number and e-mail address to one of the following: e-mail: or call toll free, after Thursday, 1-888-702-0553.

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