FBI Stops North Carolina Organized Crime

FBI agent with gun
In late October, the FBI unsealed a federal indictment that charged 17 Charlotte, North Carolina residents with fraud and organized crime. The crimes ranged from bribery and loan fraud to racketeering and money laundering.

According to the FBI’s press release on the situation, the criminals were arrested as part of Operation Wax House, which endeavored to catch mortgage fraud in the Western District of North Carolina beginning in 2007.

In July 2012, a federal grand jury indicted the alleged organized criminals, however only now has the filing been unsealed. According to the indictment, all 17 defendants were members of a criminal organization calling itself “The Enterprise,” which operated in Charlotte and Waxhaw. Over the course of its criminal existence, The Enterprise stole $75 million from victims ranging from individual investors to financial lenders. The indictment became unsealed following the arrest of several more members of The Enterprise including three of its leaders at an airport.

According to the indictment and Operation Wax House’s investigation, The Enterprise began its criminal operations in 2005 — two years before the launch of Operation Wax House. The Enterprise conducted racketeering, financial fraud, money laundering and eventually entered the drug trade.

Using deceit and working with co-conspirators, The Enterprise managed to manipulate professional athletes and doctors into investing into corporations owned by The Enterprise. Over $27 million was stolen from individual investors, many of whom borrowed personal loans in order to fund their investment. Then, instead of investing victims' personal loans, The Enterprise would take the money to fund mortgage fraud. The victims’ personal loans were also used to allow members of The Enterprise to live luxurious lifestyles. The fraud group also used the invested personal loan money to fund Ponzi scheme-like tactics to entice additional investors.

In total, 81 members of The Enterprise have been charged with crimes in addition to 14 co-conspirators who aided the criminal organization with their professions as real estate agents, home builders, and other specialized positions.

Most of the charges against members of The Enterprise carry prison terms of up to 20 years and fines of $250,000.

Operation Wax House was a joint investigation by the FBI and the IRS Criminal Investigation Division. The North Carolina Secretary of State, Securities Division also participated in the law enforcement operation.