You bet your life: an addiction to gambling makes major losers of some Tar Heel CEOs--and their companies.

• Author: Martin, Edward
• Position: Chief executive officers

Carl Mosack slams the door of his car and walks to his office at Conbraco Industries Inc. in Matthews. The reflection in the black-tinted windows shows a man with thinning white hair, still fit but starting to show the wear of his nearly 70 years. It's about 40 degrees, mild for an early January morning, with the sun struggling through broken clouds. The chill he feels has nothing to do with the weather.

The path leading to this day started years earlier on country-club golf courses. A buddy would ask, "Want a hundred on the next hole?" Mosack would nod. As his fortune and his company grew, so did the stakes. In a Charlotte apartment within walking distance of the upscale SouthPark Mall, they began to expect his calls. A shaggy-haired man nearly Mosack's age occasionally answered, but usually it was one of his half-dozen or so lieutenants. During college-basketball season, they would have callers on all six lines, with others on hold. A moonlighting golf pro or insurance salesman might man a phone rigged in one of the two bathrooms.

Somebody would give Mosack the point spreads, and he'd bet the limit the shaggy-haired man allowed--$3,000 a game--sometimes on 20 or more games a night. Betting brightened what a psychiatrist called his dysphoric moods. But over time it took more to get the high--more even than the $150,000 daily maximum the bookie could cover for all his 70 or so regulars. About a dozen were high-level executives or business owners like Mosack. "Carl wanted to bet $100,000 a game," the bookie recalls.

Mosack's money came from the industrial-valve manufacturer his father had founded in Detroit and moved South in the '50s. But it was hard-driving Carl Lewis Mosack who, after taking control in his 30s, had muscled the company into a $185 million-a-year, 1,600-employee operation. He was known around Charlotte for his philanthropy, but Conbraco's chairman and CEO ran his business with an iron fist.

The calendar reads Jan. 7, 2000. Since last summer, Mosack has taken advantage of a lenient shareholder-loan policy to borrow nearly $14 million without board approval. Five of the nine directors are family, and he owns about a quarter of the stock. Today, he'll lend himself $7.8 million, the most he has ever borrowed. When betting with the shaggy-haired bookie, getting cussed out was the worst that happened when he was slow to pay. Now dealing with people in Florida and the Caribbean, he has dropped several million on bowl games in the last two weeks.

Sullen voices on the phone calls he's getting scare him. Strangers are asking about him around town. The other day, one paced back and forth in front of the office, almost as if he wanted to be seen. The chill Mosack feels this morning is fear. Fear for himself. Fear for his family. What he doesn't know is that other people are watching, too, and have been more than six months. One is FBI Special Agent Eric Davis, an expert on white-collar crime. He has traced Mosack's calls to Miami, gone there and quizzed the underworld figures taking his action. Time, as it eventually does for most compulsive gamblers, is running out.

In one year, from the summer of 1999 to the summer of 2000, Carl Mosack won $5 million gambling. But he lost $36 million, leaving him $31 million in the hole. On March 9, 2001, facing charges that he lied to banks, laundered money and committed fraud and other crimes to cover his losses, he walked into the federal courthouse in Charlotte and surrendered to Davis. "He was somber--embarrassed," the FBI agent recalls. "He was a talented businessman who ran the company really well. He got in over his head and apparently decided it was his company, and he could do whatever he wanted."

Resigning from Conbraco, stripped of any role in the company he loved, Mosack would spend 15 months in federal custody, the last two before his release last July at a halfway house on a gritty street on Charlotte's west side. His story and those of a half-dozen Tar Heel businessmen like him have been reconstructed from dozens of sources--including court records, lawsuits, wiretap transcripts, interviews with bookies, fellow gamblers, relatives, investigators, psychiatrists, lawyers and prosecutors. Most of the principals, including Mosack, wouldn't talk openly. But their stories are more common than most people might imagine.

Some experts believe as many as one in 25 small-business bankruptcies might be gambling-related. Its impact on white-collar crime--embezzlement, bank fraud, money laundering and similar offenses--is equally high, says Edward Looney, executive director of the nonprofit Council on Compulsive Gambling in Hamilton, N.J. He frequently testifies as an expert witness. About 5% of executives gamble regularly, he estimates, slightly above the percentage for all adults. Of those, one in 20 will commit a crime to finance the habit.

"It's sad to watch," says Frank Whitney, U.S. attorney for the Eastern District of North Carolina, who prosecuted Mosack while working in Charlotte...