Maryland Resident Pleads Guilty to $8 Million Ponzi Scheme
|U.S. Attorney’s Office October 03, 2012|
Michael Winans, Jr., 30, of Jessup, Maryland, pleaded guilty today in federal court to defrauding investors out of approximately $8 million dollars, United States Attorney Barbara McQuade announced.
Joining in the announcement was Wayne County Prosecutor Kym Worthy and Special Agent in Charge Robert Foley, III, Federal Bureau of Investigation (FBI).
Information presented to the court at the time of the plea showed that Winans operated the Winans Foundation Trust (the trust) and represented that the trust was a company investing in crude oil bonds in Saudi Arabia. Winans initially recruited eleven other individuals, 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 $8,000,000 to the trust. All 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.
“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 stated, “Winans has allegedly fleeced many innocent people and betrayed their trust. This is a significant step in bringing justice to his many victims.”
FBI Special Agent in Charge Foley, “”Those individuals who engage in illegal investment schemes will face severe penalties for their criminal activity. The FBI is committed to vigorously pursuing anyone who commits these crimes.”
Winans sentencing has been set for February 27, 2013, at 2:00 p.m. 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.
A telephone line and e-mail address have been set up by the FBI/United States Attorney’s Office to collect information about potential victims. Individuals who believe 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: email@example.com or toll-free 1-888-702-0553. For those wishing to call the toll-free phone line, please call after Thursday, October 4, 2012. A representative of the FBI will follow up with potential victims for further information.