Investigators were initially tipped off after arresting another man in Wake County.
The defendant was allegedly described to FBI agents as "AK Guru" also known as Earl Carter of Hamlet, which is in Richmond County near the South Carolina border
The FBI arrested Carter after going undercover and seeing Carter's operation at his home.
The criminal complaint said FBI agents learned that "Carter has made and sold hundreds of machine guns to date. Agents also learned he makes them by either modifying legal firearms or piecing together parts from deconstructed machine guns to make working guns."
The complaint says the FBI used a confidential informant and another defendant who agreed to cooperate with law enforcement.
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A search warrant led to Carter's home in Hamlet and dozens of machine guns and homemade suppressors.
The person cooperating with the FBI estimated that Carter had sold at least 1,000 modified automatic weapons to different groups throughout the Carolinas.
The complaint alleges some customers identified as "people from the mountains" bought multiple AK-style weapons from Carter every week.
The US Attorney for the Eastern District of North Carolina is prosecuting the case.
The FBI also said the investigation is ongoing and they wouldn't comment further.
ABC Raleigh affiliate WTVD also reached out to Carter's attorney by phone and email but has not heard back.