A federal indictment accuses a man of defrauding at least 19 people at or near retirement age in Wilkes, Alleghany and Surry counties of more than $3.6 million, announced the U.S. attorney’s office for the Western District of North Carolina on June 22.
Mac Wayne Billings, 48, of Raleigh is charged with securities fraud in the indictment, returned by a federal grand jury in Charlotte. The securities fraud charge carries a maximum penalty of 20 years in prison and a $5 million fine. Billings, a former Wilkes County resident, will have an initial appearance in U.S. District Court in Charlotte.
The indictment says Billings engaged in securities fraud through Sparta-based Alpha Finance Company between 2012 and 2019.
Billings established Alpha Finance Co. 14 years ago and was its president before it dissolved, according to N.C. Secretary of State records. Alpha had an office at 38 Cheek Street in Sparta and made loans for auto purchases.
According to the indictment, Billings fraudulently obtained money from victims in Wilkes, Allegany and Surry by soliciting them to invest in Alpha via “debenture notes,” a type of debt instrument not backed by collateral. It says Billings, a licensed CPA, falsely promised Alpha’s victim-investors that their money would be used to make high interest consumer loans, from which they would receive interest payments.
Billings used little, if any, of the victim-investors’ funds to make new consumer loans and instead used some of the money to make payments to other investors and to pay himself over $1 million in salary and distributions from Alpha, stated a press release from the U.S. attorney’s office.
The indictment says Billings used investment statements, emails and meetings to mislead and deceive victim-investors into believing that Alpha was a profitable company and that their investments were safe.
“In this regard, Billings allegedly failed to disclose material information concerning Alpha’s financial and business troubles to victim-investors, including that he had sold or mortgaged most of Alpha’s assets to hard money lenders. Based on the fraudulent information provided by Billings, many of the victim-investors renewed and/or made additional investments with Alpha, causing them to incur further financial losses,” the release stated.
The release said Billings defaulted on lawsuits filed by the N.C. Commissioner of Banks (NCCOB) and the N.C. attorney general’s office that accuse him of not complying with North Carolina laws regulating consumer finance and retail installment loans. This resulted in the NCCOB revoking Alpha’s consumer finance license due to non-compliance with the N.C. Consumer Finance Act (CFA), including by having insufficient loanable assets, not paying an assessment in 2917 and not filing a required annual report in 2018.
In 2019, Judge Michael Duncan of Wilkesboro issued a default judgement and order against Alpha in Wilkes Superior Court ordering the company to surrender its consumer finance license, declaring all of its loans issued the CFA null and void and ordering that all of these loans be considered paid in full. The release said similar action was taken in Wake Superior Court.
This left investor-victims with no assets to recoup their losses, the release stated.
Dena K. King, U.S. attorney for the Western District, King commended the FBI for it investigation of the case and thanked the NCCOB, N.C. attorney general’s office and U.S. Securities and Exchange Commission for their cooperation. Assistant U.S. Attorney Michael E. Savage of the Western District is prosecuting the case.