Nov. 15. By Dave Yochum. A nationally prominent player in the world of debt collection—where money owed can be sold like a commodity for pennies on the dollar—said he may not have had a business license in North Carolina, but a law enforcement raid on his lakefront mansion on Green Dolphin was excessive and out of proportion for the offense.

“You don’t need a SWAT team in your house for this,” said Gordon Engle, owner of Turtle Creek Assets, a debt collection company.

Officers and agents from the FBI, NC Department of Insurance, the US Postal Service and Cornelius Police broke down a door and searched Engle’s 8,000-square-foot home in 2020, carrying rifles and crouching behind shields. The 2019 Mecklenburg County property valuation is $3.4 million.

Engle’s security system caught the incident on video. (See below.)

No business license

“It was a lot of firepower for not having a business license,” Engle, who has since pled guilty to five felony charges. He received a five- to 15-month suspended sentence with two years of supervised probation in May of 2021.

Background

The issue: A business license in North Carolina. The NC Department of Insurance regulates and licenses debt collection businesses statewide.

Engle, who purchased more than 1 million past-due accounts from Aaron’s, the furniture rental business, said 33 states do not require business licenses for what he does, and that oversight is what did him in. At the same time, he said Aaron’s portfolio of bad debt was really bad.

“As our staff began client actions on accounts, we were distressed to learn that many of the individuals had previously settled with Aaron’s, returned the merchandise, had never signed lease agreements with Aaron’s or were not even Aaron’s customers,” Engle said. “In fact, there were numerous instances where no valid paperwork existed or perhaps never had. The breadth of the tainted accounts was so pervasive that it threatens to render the entire portfolio uncollectible.”

The state came down hard

If you operate a debt collection business without a license in North Carolina, it’s a felony.

Turtle Creek Assets went after 81 North Carolinians for not making payments—even a single payment—on their account since leaving the Aarons store with the rented merchandise.

Engle was originally charged with 81 felony counts of failing to secure a permit from the Commissioner of Insurance in 17 counties—Alexander, Anson, Burke, Cumberland, Davie, Guilford, Iredell, Lee, Mecklenburg, Moore, Richmond, Rowan, Stanley, Stokes, Surry, Wilkes and Yadkin—which could explain the enthusiasm around the raid on his home.

“It’s easy enough not to do business in North Carolina,” Engle said. In fact, he is prohibited from applying for a debt collection license in North Carolina for three years.

Law enforcement point of view

Law enforcement officials say serving search warrants is dangerous because they do not know what or whom they may encounter.

Cornelius Police were specifically requested to conduct the entry and securing of the home to ensure it was safe.

Chief Kevin Black said officers utilized the minimal force necessary to gain entry and safely secure the home.

“Officers arrived at the address and attempted to get someone to the door. After repeatedly knocking and announcing our purpose no one answered the door. The entry team then forced entry into the home by striking the door locking mechanism with a breaching tool,” Black said.

The video

For his part Engle said he is glad he wasn’t home at the time.

He said he has spent the past two years writing, producing and editing a 17-minute video that includes segments from the raid on his house as well as an explanation of how the debt collection business works and how he went awry of North Carolina business permit law.

To view the video, click here.

The rest of the story

In October NC Attorney General Josh Stein won a consent judgment against Engle and Turtle Creek that will result in $23 million in consumer debt forgiveness for more than 20,000 people and full refunds of $223,000 to more than 650 people. Engle must also pay $6,000 in civil penalties for violations of the business registration acts and $1,475 in unpaid business registration fees—all for not having the correct insurance permit in North Carolina.

Engel is also banned from collecting debt in North Carolina.

Right now Engle said he is planning to take a break from 30 years in the collections industry. Engle says the last three years have taught him  a lot about patience and learning to not only forgive your enemies but love them as well.

“I truly wish those responsible for these unprecedented, never-before-done actions well in all they do in the future,” Engle said.