DETROIT - Michigan regulators said a member of the Winans gospel-music family led a fraudulent, multimillion-dollar investment program by promoting bogus Saudi Arabia oil bonds.
The Office of Financial and Insurance Regulation issued a cease-and-desist order Thursday, although Commissioner Ken Ross said the alleged scheme probably stopped at the end of 2008.
Michael Winans Jr. is accused of using connections in Detroit churches to get investors to sign a contract promising to double their money.
Ross said Detroit police identified at least 180 investors.
In a Ponzi scam, the original investors appear to be making money; but they're not being paid through a legitimate investment, it's the money being poured in by new investors.
Ross said the scheme was worth at least $2.6 million but could have been as high as $11 million.
In December 2008, Local 4's Roger Weber talked with Winans and several people who said they had lost thousands of dollars.
Winans said all the blame should be on his business partner, Desmond Weems. Weems' name does appear on the contracts.
"None of those people who are calling into you have done business with me, they've all been doing business with him," Winans said.
Original complaints did center on Weems, but he is only one branch of the operation boasted by Winans.
In a recent interview with Weber, Weems admitted to never having invested before and didn't know what a crude oil bond was.
Victim Kameshea Amos said she bought into the scam because she thought the Winans family name was trustworthy.
"This prestigious family, being true to God and having churches, was the real reason why this scam became so large," Amos said. "Their name meant everything to all of us."
Criminal charges have yet to be filed against any of the people mentioned to be involved.
"Prison, justice or whatever. Just throw a book at them. These people have torn lives," Amos said. "People are homeless because of this."
Watch Weber's previous reports here:
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