Date: 05-04-2023

Case Style:

United States of America v. Debra Lynn Mercer-Erwin

Case Number: 4:20-cr-00212

Judge: Amos L. Mazzant, III

Court: United States District Court for the Eastern District of Texas (Grayson County)

Plaintiff's Attorney: United States Attorney’s Office in Sherman

Defendant's Attorney:

Description: Sherman, Texas criminal defense lawyer represented Defendant charged with an international drug trafficking conspiracy

Debra Lynn Mercer-Erwin, 60, was found guilty by a jury following a two-week trial before U.S. District Judge Amos Mazzant. Mercer-Erwin was convicted of money laundering; wire fraud; conspiracy to manufacture and distribute cocaine; and conspiracy to manufacture and distribute cocaine knowing it would be imported into the United States.

“In the aircraft world, planes registered in the United States and displaying a ‘N’ tail-number, are coveted as being properly vetted and trusted to legally operate around the world. Mercer-Erwin found ways to exploit the registration process in order to profit from illegally obtained money being paid for her services,” said U. S. Attorney Featherston. “Mercer-Erwin became a drug dealer when she became aware of planes she had registered were being used to transport large quantities of cocaine. Mercer-Erwin knew that many of her clients were in the illegal drug business and she hid their identities and the sources of their money in order to reap a large profit. She became a money launderer when she created fake sales of planes that were not actually for sale in order to hide and move drug money. Transnational criminal organizations require assistance to operate in the U.S. and Mercer-Erwin facilitated the drug dealing by exploiting the plane registration process.”

“This investigation required cooperation between our international partners, investigating agents and our prosecutors,” added U.S. Attorney Featherston. “They did an amazing job putting the case together, and they are to be commended for their work.”

“This guilty verdict stems from the collaborative efforts of our trusted international, federal, state and local law enforcement partners,” said Lester R. Hayes Jr., Special Agent in Charge HSI Dallas. “Disrupting the illegal activities of transnational criminal organizations is one of HSI ‘s highest priorities and is enhanced by our partnerships at all levels. After listening to testimony of high-ranking leaders of the Columbian and Nicaraguan governments, I am convinced this investigation has significantly decreased the flow of narcotics smuggled into the U.S.”

“This investigation and successful prosecution serves as an example of how federal, state, and international law enforcement agencies work together to take down those involved in large scale money laundering in support of international drug trafficking organizations,” said Special Agent in Charge Trey McClish of the Dallas Field Office of the Department of Commerce’s Office of Export Enforcement (OEE). “OEE and our law enforcement partners will continue to identify, investigate, and dismantle transnational criminal organizations who pose a threat to our national security.”

According to information presented in court, between 2010 and 2020, Mercer-Erwin conspired with others to enable the distribution of cocaine in the United States by purchasing and illegally registering aircraft under foreign corporations and other individuals for export to other countries. Non-US citizens are allowed to register an aircraft with the FAA if the aircraft is placed in a trust that is managed by a U.S. trustee. Mercer-Erwin was the owner of Wright Brothers Aircraft Title (WBAT) and Aircraft Guaranty Corporation (AGC). WBAT often served as an escrow agent for transactions involving AGC and was the designated party responsible for FAA filings related to AGC aircraft. AGC, a corporation at that time operating out of Onalaska, Texas, an east Texas town in the Eastern District of Texas, without an airport. AGC acted as trustee to over 1,000 aircrafts with foreign owners. This allowed the foreign nationals to receive an “N” tail number for their aircrafts. The “N” tail number is valuable because foreign countries are less likely to inspect a U.S.-registered aircraft for airworthiness or force down an American aircraft.

According to prosecutors, several of the illegally registered and exported aircraft were used by transnational criminal organizations in Colombia, Venezuela, Ecuador, Belize, Honduras, Guatemala, and Mexico to smuggle large quantities of cocaine destined for the United States. The illicit proceeds from the subsequent drug sales were then transported as bulk cash from the United States to Mexico and used to buy more aircraft and cocaine. Aircraft purchases were typically completed by foreign nationals working for transnational criminal organizations who came to the United States with drug proceeds and purchased aircraft valued in the hundreds of thousands of dollars.

Mercer-Erwin exploited her position as trustee to circumvent U.S. laws by disguising the true identity of the foreign owners, failing to conduct due diligence as to the identity of the foreign owners, providing false aircraft locations, and falsifying and forging documents. Trial testimony revealed the investigation was initiated after aircraft filing irregularities were discovered in tandem with numerous AGC aircraft found carrying substantial amounts of cocaine. The testimony further revealed additional aircraft in AGC’s trust were not seized but found by foreign officials destroyed or abandoned near clandestine landing strips in several South American countries. Some of these wrecked or abandoned aircraft still contained muti-ton kilos of cocaine onboard, and few, if any, of the seized or destroyed aircraft were in the location they were reported to be located. When authorities confronted Mercer-Erwin as the representative of AGC, she refused to comply and each time law enforcement would seize an AGC registered aircraft laden with drugs, Mercer-Erwin attempted to distance herself from the narcotic’s trafficking by transferring ownership of the aircraft using fictitious information to conceal the nature, location, source, ownership, and control of the aircraft.

Additionally, Mercer-Erwin and co-defendants participated in a series of bogus aircraft sales transactions in order to conceal the movement of illegally obtained funds. The co-defendants would provide buyers and investors with fabricated documents and supply false representations regarding the bogus sale of an unsellable aircraft. The aircraft was unsellable because, unbeknownst to the buyers, the true owners of the aircraft had no knowledge or intention of selling the aircraft. Other bogus sales presented to buyers consisted of aircraft that was owned by a commercial airline and previously decommissioned and inoperable. None of the aircraft presented to the buyers were for sale.

The defendants would convince the buyer to place a deposit into an escrow account with WBAT, the title company owned by Mercer-Erwin, pending the completion of the sale. Once the money was placed in WBAT’s escrow account, the buyers were responsible for the interest accrued, and an escrow fee would be charged. In a typical sale, the deposit would remain in the escrow account. However, Mercer-Erwin would transfer the money from the escrow account to bank accounts controlled by the co-conspirators.

Since the aircraft was not truly for sale, the purchase of the aircraft would inevitably fall through, and the deposit would have to be returned. The co-conspirators would repeat the process by luring another buyer for the purchase of another unsellable aircraft. Each transaction would pay for the previous one, and Mercer-Erwin would receive an escrow fee ranging from $25,000 to $150,000 for her participation in the scheme.

Mercer-Erwin was the only defendant to proceed to trial. Co-defendants Kayleigh Moffett and Carlos Rocha Villaurrutia pleaded guilty on April 10, 2023. Moffett pleaded guilty to wire fraud and conspiracy to commit export violations, and Villaurrutia pleaded guilty to conspiracy to manufacture and distribute cocaine knowing it would be unlawfully imported into the United States; conspiracy to commit money laundering; and conspiracy to commit export violations. Four other defendants have active arrest warrants but are not in custody and are presumed innocent until proven guilty.

Mercer-Erwin was indicted by a federal grand jury in February 2021. She faces up to life in federal prison. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This is an Organized Crime Drug Enforcement Task Force (OCDETF) case and is being investigated by Homeland Security Investigations (Dallas, Brownsville, Laredo, Guatemala, Colombia, Honduras, Mexico, and Transnational Criminal Investigative Units); Department of Commerce, Bureau of Industry and Security (Dallas and Houston offices); Department of Transportation Office of Inspector General (DOT-OIG); Office of Export Enforcement; Polk County Constable Precinct 1; Southeast Texas Export Investigations Group; Internal Revenue Service; Federal Aviation Administration (FAA); Estado Mayor De La Defensa Nacional Guatemala; Fuerza Aerea Guatemalteca; and Fuerza Aerea Colombiana. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

This case was prosecuted by Assistant U.S. Attorneys Ernest Gonzalez, Heather Rattan, and Lesley Brooks.

Conspiracy to Manufacture and Distribute Cocaine
(1ss)
21 U.S.C. § 846 (Conspiracy to Manufacture and Distribute Cocaine)
(1sss)
21 U.S.C. § 846 (Conspiracy to Manufacture and Distribute Cocaine)
(1ssss)
CONSPIRACY TO MANUFACTURE AND DISTRIBUTE COCAINE
(1sssss)
Conspiracy to Manufacture and Distribute Cocaine Intending, Knowing, and with Reasonable Cause to Believe that the Cocaine will be Unlawfully Imported into the United States
(2ss)
21 U.S.C. § 963 (Conspiracy to Manufacture and Distribute Cocaine Intending, Knowing, and with Reasonable Cause to Believe that the Cocaine will be Unlawfully Imported into the United States)
(2sss)
21 U.S.C. § 963 (Conspiracy to Manufacture and Distribute Cocaine Intending, Knowing, and with Reasonable Cause to Believe that the Cocaine will be Unlawfully Imported into the United States)
(2ssss)
Conspiracy to Manufacture and Distribute Cocaine Intending, Knowing, and with Reasonable Cause to Believe that the Cocaine will be Unlawfully Imported into the United States
(2sssss)
(Manufacturing and Distributing Five Kilograms or More of Cocaine Intending, Knowing and with Reasonable Cause to Believe that the Cocaine will be Unlawfully Imported into the United States
(3ss)
MANUFACTURE/DISTRIBUTE FOR ILLEGAL IMPORTATION - NARCOTICS
(3sss)
21 U.S.C. § 959, 18 U.S.C. § 2 (Manufacturing and Distributing Five Kilograms or More of Cocaine Intending, Knowing and with Reasonable Cause to Believe that the Cocaine will be Unlawfully Imported into the United States)
(3ssss)
Conspiracy to Commit Money Laundering
(4ss)
18 U.S.C. § 1956(h) (Conspiracy to Commit Money Laundering)
(4sss)
18 U.S.C. § 1956(h) (Conspiracy to Commit Money Laundering)
(4ssss)
Conspiracy to Commit Money Laundering
(4sssss)
Conspiracy to Commit Export Violations
(5ss)
18 U.S.C. § 371 (Conspiracy to Commit Export Violations)
(5sss)
18 U.S.C. § 371 (Conspiracy to Commit Export Violations)
(5ssss)
Conspiracy to Commit Registration Violations Involving Aircraft Not Providing Air Transportation in violation of 49 U.S.C. § 46306
(6ss)
18 U.S.C. § 371 (Conspiracy to Commit Registration Violations Involving Aircraft Not Providing Air Transportation in violation of 49 U.S.C. § 46306)
(6sss)
18 U.S.C. § 371 (Conspiracy to Commit Registration Violations Involving Aircraft Not Providing Air Transportation in violation of 49 U.S.C. § 46306)
(6ssss)
Conspiracy to commit interstate and foreign transport of stolen property in violation of 18 U.S.C. § 2314
(7ss)
18 U.S.C. § 1349 (Conspiracy to Commit Wire Fraud)
(7sss)
18 U.S.C. § 1349 (Conspiracy to Commit Wire Fraud)
(7ssss)
CONSPIRACY TO COMMIT WIRE FRAUD
(7sssss)

Outcome: 05/03/2023 446 Minute Entry for proceedings held before District Judge Amos L. Mazzant, III: Jury Trial completed as to Debra Lynn Mercer-Erwin held on 5/3/2023. Dft Location: Custody. Attorney Appearances: AUSA - Ernest Gonzalez and Lesley Brooks; Defense - Joe White, Kate White, and Matthew Cyran.No exhibits. (Court Reporter Chris Bickham.) (kkc, ) (Entered: 05/03/2023)
05/03/2023 448 Jury Instructions as to Debra Lynn Mercer-Erwin (kkc, ) (Entered: 05/03/2023)
05/03/2023 449 Trial ADMITTED EXHIBITS LIST by USA as to Debra Lynn Mercer-Erwin (kkc, ) (Entered: 05/03/2023)
05/03/2023 450 Trial ADMITTED EXHIBITS LIST by Debra Lynn Mercer-Erwin (kkc, ) (Entered: 05/03/2023)
05/03/2023 451 Trial ADMITTED WITNESS LIST by USA as to Debra Lynn Mercer-Erwin (kkc, ) (Entered: 05/03/2023)
05/03/2023 452 Trial ADMITTED WITNESS LIST by Debra Lynn Mercer-Erwin (kkc, ) (Entered: 05/03/2023)
05/03/2023 453 JURY VERDICT as to Debra Lynn Mercer-Erwin (1) Guilty on Counts 1, 2, 4, 7; Debra Lynn Mercer-Erwin (1) Not Guilty on Counts 3, 5, 6 of the Fifth Superseding Indictment. (kkc, ) (Entered: 05/03/2023)

Guilty.

Plaintiff's Experts:

Defendant's Experts:

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