The Mysterious Aircraft of Onalaska Texas

Why does a small East Texas town called Onalaska have more than 1,000 registered aircraft – and no airport?

Nestled along the shores of Lake Livingston, Onalaska lacks an airport.

A WFAA review, however, has found more than 1,000 registered aircraft claiming an Onalaska address. That’s equivalent to one plane for every three Onalaska residents, which is more per capita than anywhere else in the country.

In fact, more planes are registered to Onalaska than the number of registered planes in entire cities such as Seattle, San Antonio, San Diego, or even New York.

Just as surprising, the aircraft are registered to only two Onalaska P.O. boxes. That’s because the aircraft owners do not live there. Not even close.

WFAA has learned Onalaska is ground zero for a practice that allows foreigners to anonymously register their planes, and one that critics say makes the United States an easy target for drug dealers, terrorists and other criminals seeking to register their planes.

“When you can conceal the true ownership of a plane, you’re putting a lot of people in jeopardy,” said Joe Gutheinz, a former Federal Aviation Administration (FAA) special agent. “If you’re a terrorist and you have a way of concealing your secret ownership of a plane in the United States, you’re going to do it.”

But industry advocates told WFAA that large corporations and foreign partnerships often need to use trusts because of the FAA’s strict citizenship requirements.

To register a plane, owners need to be a U.S. citizen or a permanent resident. However, the FAA will allow foreigners to register their planes by transferring a title to a U.S. trustee.

For $5, an owner can register a plane with the FAA.

Planes registered to the name of U.S. trust carry an “N” tail number. It’s a distinction that experts say carries advantages, including allowing planes to receive less scrutiny than when carrying a tail number from a different country.

rust company officials who handle such trusts told WFAA that they use “due diligence” when vetting owners to ensure they are reputable. However, others disagree and say too little information is readily available in the FAA registry, allowing foreigners to shield their true ownership from law enforcement.

“We shouldn’t require less information to … to register a car than to register an aircraft,” U.S. Rep. Stephen Lynch (D-Mass.) told WFAA. “If you are a foreign national … you can register an aircraft here and the government doesn’t know anything about it. Come one. It’s laughable.”

In a post 9/11 America, Gutheinz and Lynch question the practice.

Federal studies back them up.

In 2013, an audit by the Office of Inspector General for the Department of Transportation estimated that about 5,600 planes “lacked key information” about the true ownership.

In a random review of the five major trust companies with the most registrations, federal investigators found the companies “could not or would not provide” the identities of three of four foreign owners requested.

One of the trustees even requested that investigators subpoena the information. The trustees that did provide the information took two months to do so.

“Without collecting and maintaining complete and accurate aircraft data, FAA increases the risk of not meeting its aviation safety mission,” the audit found.

Now trustees are required to turn over the information to the FAA within 48 hours. The 48-hour requirement, however, is too long given the potential for disaster, Lynch said.

“That is not a good policy,” said Lynch, who chairs the House National Security Subcommittee. “We shouldn’t be into accident re-construction. At that point we’re too late in the game.”

The DOT report cited several incidents involving aircraft registered by trusts that raised red flags:

  • In 2006, A U.S. bank became a trustee on an aircraft for a Lebanese politician who turned out to be “backed by a well-known U.S. Government-designated terrorist organization.” “It wasn’t until the bank found out that they were affiliated with Hezbollah that the relationship ended,” Lynch told WFAA.
  • In 2010, an airplane registered to a trust approached the Tripoli International Airport with no landing permit just hours before the U.N. Security Council met to approve a “no-fly zone” over Libya. The owner of a foreign oil corporation had registered the plane through a trust but sold a “large percentage” of his company to a Chinese company.
  • In 2012, an FAA inspector was unable to find out who was flying a Boeing 737 registered on behalf of a foreign owner. When the FAA contacted the foreign owner, officials were told the airplane had been leased to a United Arab Emirates-based rental company. The foreign owner couldn’t “provide the inspector” with information about who was flying the plane.

“It is absolutely making America less safe,” Gutheinz said after reading the DOT findings.

Gutheinz and Lynch blame a lackadaisical culture within the FAA. Gutheinz said the agency treats the people who register planes as customers rather than those that should be regulated.

“I’m absolutely ashamed about their indifference to a real problem,” Gutheinz said.

Citing the backlog created by last month’s government shutdown, FAA officials declined to comment.

Lynch said he will soon file legislation to require critical information about foreign owners be on file with the FAA.

“Just tell us who owns these aircraft,” Lynch said. “They could easily be turned into weapons. Anybody around 9/11 understands that painfully.”

DOT officials told WFAA that one of the trustees cited in the 2013 audit was Aircraft Guaranty Corp. It’s the company that registered more than 1,000 planes to two P.O. Boxes in Onalaska.

Connie Wood, an Onalaska resident, founded the company more than three decades ago. It was based in Onalaska until he sold the company several years ago. Wood declined to speak with WFAA.

On its website, the company advertises that it’s in the business to help those “who can’t meet the FAA citizenship requirements.”

But some of those registered by the company in trusts have been linked to questionable or unsavory characters over the years.

Two of the planes registered to the trust company were named during a federal investigation of a massive drug-smuggling operation, according to federal court records filed in 2013.

Here’s what federal law officers detailed in court records seeking to seize one of those two planes:

The plane had been registered in a trust in 2012 on behalf of a Mexican company. The company’s legal representative, Fausto Velez Urbina, was convicted in 2005 on federal cocaine trafficking charges and deported back to Mexico in 2010. Urbina purchased the plane from an aircraft broker named Mauricio DeLeon for $1.69 million.

DeLeon had been linked by investigators to former Gulf Cartel leader Osiel Cardenas-Guillen. Cardenas-Guillen, now housed in a U.S. federal prison, founded the much-feared Los Zetas, comprised of former military commandos who served as ruthless assassins for the cartel.

And that’s not all.

In 2008, a plane registered to Aircraft Guaranty Corp. lost power upon take-off and crashed into a home near Caracas, Venezuela, killing seven. The pilot, a twice-convicted drug smuggler, died along with two other passengers on the plane.

The family sued the company seeking to find out the real owner of the plane. Aircraft Guaranty denied any liability. According to media accounts, the family’s attempts to find the real owner went nowhere.

Several years ago, former Guatemalan Vice President Roxanna Baldetti was arrested on corruption charges. According to news accounts, Baldetti routinely flew around on a plane registered by Aircraft Guaranty on behalf of a Panama-based company. She is now serving a prison sentence in Guatemala. She still faces federal drug charges in the U.S.

Aircraft Guaranty’s planes are still be registered to P. O. boxes in Onalaska, but the company is now based in Oklahoma City.

The owner, Debra Mercer-Erwin, bought the company in 2015. She said she still has two employees pick up the mail for the company at the Onalaska P.O. boxes. But, otherwise, the company’s operations now are in Oklahoma City.

“We collect passports on everybody,” Mercer-Erwin told WFAA. “We know who our clients are. We have constant communication with our clients.”

She said Aircraft Guaranty hasn’t been contacted by the FAA about problems with any of her company’s registered planes since she took ownership. 

She discounted the notion that criminals would go through the trouble to place their airplanes in trusts.

“Why would they want to provide all their personal information and their passport documents to place an aircraft in trust?” she said.

But WFAA found there was an incident involving one of Aircraft Guaranty’s planes that did occur on her watch.

In 2016, the Drug Enforcement Administration seized one of the company’s planes while investigating an international drug smuggling and money laundering conspiracy, according to records filed in a New York federal court. The plane was seized when agents arrested one of the accused ringleaders, who ran a business in Nevada.