Maryland Resident Sentenced to 14 Years in Prison for $8 Million Ponzi Scheme
|U.S. Attorney’s Office February 27, 2013|
Michael Winans, Jr., 30, of Jessup, Maryland, was sentenced today to 14 years in federal prison for 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 D. Foley, III, Federal Bureau of Investigation (FBI).
In addition to the prison sentence, United States District Judge Sean Cox also ordered Winans to pay restitution in the amount of $4.7 million dollars to the hundreds of victims he defrauded as well as a $175,000 fine, which is the maximum allowed by law.
Winans pleaded guilty in October 2012 to operating the Winans Foundation Trust (the Trust) and representing that the trust was a company investing in crude oil bonds in Saudi Arabia. Winans initially recruited 11 other individuals, whom he called “shareholders” in the trust, to invest in the crude oil bonds. Winans required the so-called shareholders to solicit additional investors and then send the investors’ funds to the trust. Over 1,000 victim investors from several states sent over $8,000,000 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. In reality, Winans converted some of the victim investors’ money to his own personal use. He also redistributed some of his later victims’ money to the earlier victims while falsely representing 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.”
“We are pleased that the many victims of Michael Winans can rest easier tonight knowing that he has been convicted and will be spending his time in federal prison,” said Prosecutor Kym L. Worthy.
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.”
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: firstname.lastname@example.org or toll-free 1-888-702-0553.