Severino Seeger won â‚¬500,000 (Â£360,000; $530,900) on the show, Germany's Quest for a Superstar (DSDS) last month.
The 28-year-old was accused of being part of a gang that tricked victims, mainly elderly women, out about â‚¬19,000 using a bank card scam.
Reports say the court hearing in Frankfurt was delayed until after the DSDS final.
Mr Seeger appeared before a judge on Tuesday as the court was due to hear testimony from several elderly witnesses.
Local media showed images of fans crowding around the building, some wearing T-shirts with the slogan "Superstar 2015: Prince of hearts".
The singer is alleged to have posed a as bank employee to help collect cards and pin numbers from victims, many of them older women.
Gang members - several of whom have already been convicted - called their targets to tell them their cards needed to be checked because of technical problems.
The oldest victim is said to have been 88 years old.
Mr Seeger told the court he had just separated from his first wife when he was manipulated by a number of people including a cousin, according to German media.
"I said yes because I was stupid," he said.
He was earlier quoted as saying he was "ashamed" of what he had done. "I will pay the money back to the cent," he told Bild newspaper.
The singer was voted winner of the 12th series of DSDS - part of the "Idol" franchise - in mid-May with the song Hero Of My Heart, written by Dieter Bohlen who is also a judge on the show.
As well as the prize money, Mr Seeger, from the town of Waechtersbach, north-west of Frankfurt, won a top recording contract.
He had been due to appear in court in March, according to reports. However his hearing was said to have been delayed initially after the judge fell ill, and later postponed due to his participation in the RTL TV show.
RTL said it would not comment until after the court had given its verdict, expected on 10 June.
The newly-crowned winner of a German TV singing contest has admitted in court to defrauding pensioners.