DALLAS — A federal magistrate judge on Monday declined to toss statements made by the owner of an Oklahoma City-based aircraft trust company and her daughter in a wide-ranging probe that alleged they conspired to traffic drugs and conceal the registered ownership and whereabouts of planes.
Aircraft Guaranty Corp.’s owner, Debra Lynn Mercer-Erwin and her daughter, Kayleigh Moffett, both appeared in court for the hearing. Neither of them would comment to WFAA.
Their trial is slated to begin next month.
Prosecutors have previously said that a series of stories WFAA aired starting in 2019 spurred a federal investigation resulting in their indictments and five other people.
During the Monday hearing, Mercer-Erwin’s attorney said her rights were violated because she was questioned repeatedly and not taken to a magistrate as quickly as possible.
A motion filed by her attorney, Joe E. White Jr., said a “swarm of heavily armed federal agents” showed up at their Oklahoma City offices. She was arrested and allowed to contact her aviation attorney who came to the office along with his law partner.
The motion said the federal agents took her to a trailer, where she was interrogated for hours, rather than taken “without unnecessary delay” to a magistrate.
Mercer-Erwin talked to agents repeatedly in the ensuing days.
In the court hearing, Brett Behenna, Moffett’s attorney, contended the application for a search warrant inaccurately made it seem like Mercer-Erwin’s companies - Aircraft Guaranty Corp. and Wright Brothers Aircraft Title - had more linkages to some of the co-conspirators than they actually did. He contended that it was done with the intention of misleading the court to get the search warrant.
“The search warrant is replete with factually inaccurate statements” and material omissions, he told the judge. “It’s done to make it look like all these are companies are melded together in a conspiracy to violate the law.”
Magistrate Judge Kimberly Priest Johnson told Behenna that the arguments he had made were all “arguments for a jury.”
“I need you to wrap it up,” she said after allowing him to examine a Homeland Security agent for an hour.
The judge then said she would rule on the motion to suppress evidence obtained as part of the search warrant by Friday.
Mercer-Erwin and her daughter were both indicted in 2020.
Since that time, federal authorities had continued to allow the pair to run Aircraft Guaranty Corp, but under the oversight of investigators. No new planes could be put in trust with the company and existing trusts cannot be renewed.
Any owner wanting to transfer the registration of a plane must be interviewed and vetted to make sure they have no drug smuggling links, Ernest Gonzalez, the lead prosecutor told the judge.
Last month, federal prosecutors removed the government’s approval that had allowed them to run the business.
Gonzalez said they did so because after the women got new attorneys last summer, they no longer had “direct contact” with Mercer-Erwin and her daughter regarding the operation of the business.
White, Mercer-Erwin’s attorney, told the judge that all that had changed was that he required communications with the government to go through his law office rather than directly to Mercer-Erwin.
The magistrate agreed to let the women continue running the business.
WFAA’s investigation began after receiving a tip that more than a thousand planes were registered to two post office boxes in Onalaska, Texas.
The investigation found Onalaska was the epicenter of a practice that enabled foreigners to anonymously register their aircraft.
WFAA found several of Aircraft Guaranty’s registered aircraft were found outside of the United States loaded with drugs.
The company’s aircraft were also involved in fatal crashes, and the real owners could not be identified, which the law requires.
A federal probe into Aircraft Guaranty also led to charges that Mercer-Erwin, Moffett and Federico Machado were involved in a Ponzi scheme in which investors allegedly were defrauded of $350 million.
Their money allegedly was illegally diverted from supposed aircraft buys and funneled into foreign investments, according to a federal prosecutor and the federal indictments.