For decades, the last name Winans has been affiliated with award-winning gospel music, but Michigan regulators say it was also used to scheme church members out of what could amount to $11 million through a Ponzi scheme.

The Michigan Office of Financial and Insurance Regulation (OIFR) has accused Michael Winans Jr. of being the ringleader of a multi-level scheme using the family name and connections in the Detroit religious community to fund a fraudulent crude oil bond investment program.

Winans Jr., a former member of the gospel group Phase 2, is the son of Michael Winans Sr. of the quartet The Winans and grandson to Delores Winans and David Winans. David Winans managed The Winans to six Grammy awards.

Michigan regulators allege that Winans Jr., and subordinates Desmond Weems, Latonya Garth and his father, Michael Winans Sr., and a number of other related business entities violated the state’s Uniform Securities Act and all were ordered to cease and desist from the sale of unregistered securities products. The OFIR alleges that these individuals were not licensed to sell securities in Michigan and the products were not registered with state officials.

Following numerous consumer complaints, the Detroit Police Department contacted OFIR in October 2008 regarding an alleged oil bond investment program, according to the office. An investigation found that from early 2007 to the end of 2008, Michael Winans Jr. was alleged to have owned an oil bond and recruited team members to solicit investors at Detroit-area churches. Those investors were told their funds would stay in an American bank account and remain in the possession of Winans Jr.

Bank records, however, show the funds did not stay in an American bank account, OFIR said, but flowed into the Winans Foundation Trust and then transferred to numerous accounts for business entities owned by Winans Jr. for expenses, including cash withdrawals. Michigan officials said like other Ponzi schemes, a small portion of the funds went back to investors as an alleged return on investment.

Bank records also indicated that Weems and Garth offered their own separate oil bond program, officials said.

Detroit police interviewed more than 180 alleged victims, who invested nearly $2.6 million in the scheme, but the actual number of victims is estimated to be higher and the amount of money lost could reach $11 million, OFIR said.

“Our investigation found that Michael Winans Jr. orchestrated a scheme that resulted in hundreds of Detroit residents losing millions of hard earned dollars,” OFIR Commissioner Ken Ross said in a statement. “Promising sky-high, guaranteed returns, these scammers unscrupulously fleeced unsuspecting churchgoers who let their financial guard down.”

Each member is accused in the scheme of violating Michigan’s Uniform Securities Act could face a criminal penalty of not more than $25,000 for each violation and/or up to 10 years in prison.