DALLAS — A new law gives the Federal Aviation Administration six months to close loopholes that allow foreigners to anonymously register their planes. As a result, aircraft trusts and shell companies that register planes will be required to have more detailed and transparent record keeping.
Those loopholes were highlighted in a 2019 WFAA investigation that showed how easy it was for drug dealers, terrorists and other criminals to obscure ownership when they register planes in the United States.
“It’s a good first step,” said Ladd Sanger, a Dallas aviation attorney. “We need to identify the people, the breathing bodies that are behind these aircraft ownership in Mexico and around the world.”
In 2020, a year after the WFAA initial story aired, The Government Accountability Office issued a report titled, “Aviation: FAA needs to better prevent, detect and respond to fraud and abuse risks in aircraft registration.”
The GAO report made 15 recommendations. The Federal Aviation Administration agreed with the recommendations. But four years later, the recommendations had largely not been implemented.
“The FAA is aware of this problem, but hasn't changed its registration process,” U.S. Sen. Charles Grassley, R-Iowa, said during an April congressional hearing.
Grassley sponsored legislation that requires the FAA to implement the GAO recommendations. This past May, Grassley’s bill was included as a provision in the FAA Reauthorization Act of 2024. The legislation allowed $105 billion to fund the FAA through fiscal year 2028.
Grassley spotlighted WFAA’s investigation in his report to Congress.
By law, the FAA will have to collect information on every individual who registers a plane. They also are required to collect information on entities that own more than 25% of the aircraft. They’ll also have to verify the applicant and dealer’s eligibility to register a plane in the United States.
“That’s really at the heart of what needs to be done here,” Sanger said.
Additionally, the FAA will have to increase registration and dealer fees to ensure the fees cover the FAA’s costs to collect and verify applicant information while keeping pace with inflation.
Currently, it only costs $5 to register a plane, along with a cost of $10 for a dealer’s aircraft registration certificate, and $2 for each additional certificate issued to the same dealer.
WFAA’s February 2019 story revealed that there were more than 1,000 planes registered to two P.O. Boxes in Onalaska, Texas, a town of 3,000 people with no airport. It had more registered planes than big cities such as Seattle, San Diego, or New York City.
The investigation found Onalaska was the epicenter of that legal loophole.
The initial WFAA story spawned a federal investigation, shook up the aircraft trust industry, and disrupted drug smuggling in Latin America, thousands of miles away. The federal probe also led to the discovery of a Ponzi scheme involving hundreds of millions of dollars in fake plane deals.
The 2023 federal trial that followed resulted in the conviction of Debra Mercer-Erwin, a well-known Oklahoma City businesswoman on drug smuggling charges.
Mercer-Erwin owned Aircraft Guaranty Corp., the company that registered more than a thousand planes in Onalaska. She remains in federal custody awaiting sentencing. She faces up to life in prison.
“Someone once told me that real change doesn't come from within, the change comes from the outside,” said Jesus Romero, a former intelligence official who testified at Mercer-Erwin’s trial.
“My concern is, how are we going to enforce those changes?” Romero said. “The FAA doesn't have the resources to do that.”
Romero served as chief of the Joint Interagency Task Force South in Guatemala, a multi-U.S. agency set up to detect and monitor drug trafficking. He also authored the book “Final Flight: Queen of Air,” which highlights Mercer-Erwin’s role in helping to facilitate the smuggling of hundreds of tons of cocaine into the United States through Mexico, Central America and the Caribbean.
In his book, Romero called Mercer-Erwin “a major player” in “a transnational criminal organization associated with the Mexican Cartel.”
Under the new law, the FAA has six months to act on the GAO recommendations. Then, the FAA is required to report to Congress on the agency’s progress.
WFAA asked the FAA about the status of complying with the new law. The agency sent a one-line statement, saying, "We comply with Congressional mandates."
“It's going to take teeth and enforcement and due diligence by the FAA,” Sanger said. “But at least there's a framework here, and the problem has been recognized.”