Debbie Mercer-Erwin, the owner of Wright Brothers Aircraft Title Inc. and Aircraft Guaranty Corporation, has been accused of helping drug traffickers register aircraft in the US.
US Marshalls raided the Oklahoma City offices of Wright Brothers Aircraft Title before Christmas and arrested Mercer-Erwin and her daughter Kayleigh Moffett. Both were released before the New Year. Aircraft Guaranty Corporation is based in Onalaska, Texas and was acquired by Mercer-Erwin.
Federal prosecutors have accused Mercer-Erwin, Moffett and six other individuals outside the company of seven different charges. Various defendants are accused of running a complex $350m Ponzi scheme, helping drug traffickers deregister and change aircraft ownership records, failing to register aircraft exports and participating is a series of fake aircraft transactions. (Ponzi schemes lure investors to make investments and pay profits to earlier investors with funds from more recent investors).
The accused face charges of multiple drug-related offences, as part of a scheme to conceal ownership of foreign aircraft, according to indictments filed in Texas.
The unsealed court documents claim the defendants allegedly purchased and illegally registered aircraft under foreign corporations and other individuals for export to other countries. The indictment states dealings totalled $350m in criminal activity since 2016.
$350m in criminal activity
Several of these aircraft were used by drug cartels in Colombia, Venezuela, Ecuador, Belize, Honduras, Guatemala and Mexico to smuggle large quantities of cocaine into the US.
The indictment further alleges that illicit proceeds from the subsequent drug sales were then transported as cash from the US to Mexico and used to buy more aircraft and cocaine.
The aircraft purchases were typically completed, it is alleged, by wiring funds from currency exchange services and/or banks in Mexico to shell corporations operating in the US as aircraft sellers/brokers.
These aircraft were held in trust by Aircraft Guaranty Corporation for the benefit of foreign corporations or individuals. Mercer-Erwin, Moffett and Federico Machado, owner of South Aviation and Pampa Aircraft Financing have been charged with engaging in a fraud scheme related to the acquisition of aircraft.
The indictments state that Machado recruited investors to invest in aircraft purchase deposits for sales transactions that never took place. Investors allegedly placed their funds in an escrow account held by Wright Brothers Title Company. The company was said to be running a Ponzi scheme and investing the money for personal purposes. Machado allegedly diverted funds to a mineral mine in Guatemala.
In February 2020, Belize authorities seized an aircraft with 2,310kgs of cocaine – making it the largest-ever drug seizure for the country. According to the filings, several other “defendant-registered aircraft were seized or destroyed while smuggling drugs”.
Acting US Attorney Nicholas J. Ganjei said: “The threat posed by transnational crime cannot be overstated. The American public can expect the Eastern District of Texas to be relentless in its fight against the sometimes invisible, but always dangerous, threat of transnational organised crime.”
“The indictment in this case demonstrates that individuals who choose to circumvent Federal regulations pertaining to aircraft registration and ownership will be pursued to the fullest extent of the law,” said Todd Damiani, special agent-in-charge, Southern Region, US Department of Transportation Office of Inspector General.
If found guilty, the defendants face a prison term ranging from a minimum of 10 years to life in federal prison for the drug conspiracy charges and up to 20 years for the money laundering, export and wire fraud violations.
However, the authorities highlight that all the defendants remain innocent until proven guilty. “It is important to note that a complaint, arrest, or indictment should not be considered as evidence of guilt and that all persons charged with a crime are presumed innocent until proven guilty beyond a reasonable doubt,” according to the document from the US Attorney’s Office, Eastern District of Texas.
No one from Wright Brothers was available to respond to Corporate Jet Investor’s questions about the allegations.
Oklahoma transaction specialists say that Wright Brothers is one of the six most active escrow companies involved in aircraft transactions. Aircraft Guaranty Corporation’s website claims the company “controls over one billion in aircraft value. With over 2,000 aircraft registered in more than 160 different countries”.