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Broken Trust | The scandalous story behind one tiny Texas town's surprising number of planes

Prosecutors say WFAA's investigation into Onalaska, Texas, led to criminal indictments resulting in a major reduction in Central American drug trafficking flights.

Tanya Eiserer, Mark Smith

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Published: 7:40 PM CDT June 28, 2023
Updated: 7:40 PM CDT June 28, 2023

More than four years ago, we began with a question: Why were more than a thousand planes registered in Onalaska, a tiny East Texas town nestled along the shores of Lake Livingston? 

In 2019, we found that there were more planes registered to two post office boxes in tiny Onalaska than in big cities, such as Seattle, San Antonio, San Diego or New York City. 

Onalaska, we also discovered, doesn’t even have an airport. 

“Onalaska is a very small town,” Zachary Davies, a lifelong resident and realtor, told us back then. “It’s a very quiet, little town. There’s not a lot to do.” 

Our initial February 2019 story spawned a federal investigation, disrupted drug smuggling efforts that started thousands of miles away, resulted in the discovery of a massive scheme involving fake plane deals and shook up the entire aircraft trust industry.

The federal trial that followed resulted in a well-known Oklahoma City businesswoman’s conviction on drug smuggling charges that could put her in prison for the rest of her life.  

Credit: WFAA-TV
Zachary Davies

What WFAA found was that Onalaska was the epicenter of a legal loophole that allowed foreigners to anonymously register their planes.  

But how?

Our investigation revealed that the FAA allows foreign nationals to gain U.S. registration for their aircraft by transferring ownership to a trust company.  

In other words, a check of Federal Aviation Administration records on these planes would show aircraft registered in the name of the trust company, in effect helping to shield the identity of the foreign owner.  

Having an aircraft registered in the U.S. also allows the plane to carry an “N” number on its tail -- a designation that gives the plane certain advantages.

“If you’re operating the airplane in and out of the US, it draws much less scrutiny [with that marking],” said Ladd Sanger, an aviation attorney.  

Joe Guthienz, a former FAA investigator and attorney, told WFAA that “there's a sense of confidence that ‘Gee, the Americans must have approved what's going on here. It's got the stamp of approval of the United States of America.’” 

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