Ariel Winter Case -- Children Services Says Mom Should Lose Custody

A stunning development in the Ariel Winter case -- the L.A. County Dept. of Children and Family Services has issued a blistering report against the "Modern Family" star's mom, saying the judge should strip her of custody and award a permanent guardianship to Ariel's older sister.

The DCFS report concludes Chrystal Workman, Ariel's mom, committed emotional abuse against her 14-year-old daughter. As for the physical abuse claim, DCFS said the evidence is "inconclusive."

DCFS feels the situation is so dire, it planned to go to Dependency Court to make Ariel a ward of the state. However, DCFS officials decided to give the judge in the current case a chance to award Ariel's sister, Shanelle Gray, a permanent guardianship.

Chrystal's lawyer suggested Shanelle had ulterior motives -- i.e., a money grab -- but the judge shut that argument down.

At one point during the hearing, Shanelle's lawyer told the court ... she wants Ariel and her parents to begin family therapy sessions as soon as possible.

The report also says Ariel is articulate and has credibility and that weighed in the conclusions.