Broken Trust: The Onalaska Drug Plane Scandal

Four years ago, over a thousand planes were registered in a tiny East Texas town. Why would there be more planes registered in Onalaska, a town with no airport, than in cities like Seattle or San Antonio? 


In the United States, there is a legal loophole that allows foreigners to register their planes anonymously. The FAA allows foreign nationals to gain registration for their aircraft by transferring ownership to a trust company, which in turn shields the identity of the true owner of the plane. These planes that are owned by American trust companies are given an N-number and this designation gives the plane certain advantages. It places trust in people that everything going on with the plane is approved. 


WFAA wanted to know who owned all these planes in Onalaska and found that they were listed to Aircraft Guaranty Corporation, a company that was previously located in Onalaska and had since moved to Oklahoma City. Debra Mercer-Erwin, the owner of Aircraft Guaranty Corporation, stated in a 2019 interview that they collect passports and addresses of those who list their planes in her trust, and that it would be difficult for a criminal or a drug user to place their planes in her trust. 


However, it appears this was not the case. Two Aircraft Guaranty planes were cited in a 2012 federal drug smuggling investigation. Then, in 2016, the Drug Enforcement Administration seized an airplane registered to the trust and opened a criminal case. 


In 2008, a plane crashed into a home in Venezuela, killing seven people. The pilot was a twice-convicted drug smuggler and the plane was registered in the U.S. to Aircraft Guaranty. The company never identified who owned the plane.  


In 2013, a helicopter crashed into a golf course in Mexico and killed five people. Ladd Sanger, one of the managing partners at Slack Davis Sanger, represented three of the victims’ families. The helicopter that crashed was registered to Aircraft Guaranty. Sanger contacted the trust, but was never able to find out who was responsible for the accident. 


In April of 2019, the government demanded that Aircraft Guaranty hand over information on all aircraft being operated overseas. It was found that some of the planes held in the trust were being repeatedly sold and the trust didn’t know who actually owned the planes. When investigators continued digging into Aircraft Guaranty’s records, they also discovered a Ponzi scheme. 


Mercer-Erwin went to trial to face accusations of putting planes into the hands of drug traffickers. Trial testimony showed cartels flew U.S.-registered aircraft from Mexico to cocaine-producing countries in South America to be loaded. The drugs were then smuggled into the United States. 


Interestingly, after Mercer-Erwin’s indictment, there was a large decrease in the amount of cocaine air trafficking. High-ranking Latin American officials testified that they saw drug flights fall from hundreds down to a few, over a two-day period. The number of jets carrying drugs in the Caribbean dropped 59% from 2020 to 2022. There was also a 29% drop in cocaine seizures in Central America during this period. It is believed that Mercer-Erwin’s indictment contributed to this. 


After deliberations, the jury convicted Mercer-Erwin of being a drug trafficker and convicted her in connection with the Ponzi scheme. She now awaits sentencing and faces up to life in prison. 


The week of the trial, Congressman Lynch reintroduced the Aircraft Ownership Transparency Act, which requires that the identity of foreign plane owners must be held on file with the FAA. 


Ladd Sanger has over 25 years of experience representing clients in aviation legal matters. He is an FAA-licensed Airline Transport Pilot with a jet type rating in addition to being a licensed helicopter pilot. He understands the technical aspects of aviation crashes. 


Since 1993, Slack Davis Sanger has served clients nationally and internationally with personal injury claims, wrongful death, and medical malpractice suits. With a combined experience of more than 250 years, Slack Davis Sanger attorneys have extensive experience in litigation involving aviation accidents.

For more information or to speak with Mike Slack, please contact Marketing Director Stephanie Eitrheim at Slack Davis Sanger at 512-225-5322 or