Everywhere you travel on the Outer Banks of North Carolina you see pictures of horses with a ship's lantern around it's neck.  Nags Head was named after a scheme developed by "retired" pirates to increase their supply of spending money (for beer).

The shores of North Carolina are very dangerous with plenty of opportunities to beach a ship because of the rapidly changing weather and sand bars.  The only hills in the area are large sand dunes.  At the time many pirates knew that there were many experienced sailors from New England coming down the coast.  

So during bad weather they would  parade the nags up and down the dunes with ship lanterns tied to their necks.   The sailors out at sea would see those lights and think that those were ships closer to shore in calmer waters.  The ships would then go closer to shore and beach themselves.  Once the weather calmed down the pirates would then go out to the beached ships and loot them.