However, prosecutors allege she willfully ignored warnings about a fake passport and an incomplete background check.
Sherman, Texas — Owner of Aircraft Trust Company Debra Lynn Mercer-Irwin Despite admitting that her aircraft ownership firm’s escrow account may have been used in a Ponzi scheme, she denied committing any crimes.
Mercer-Erwin took the testimony for more than five hours in federal court on Friday, facing charges of money laundering, drug trafficking, wire fraud and export violations.
Her testimony follows two federal agents who previously testified that Mercer Irwin admitted to participating in a Ponzi scheme involving a fake plane deal with alleged co-conspirator Federico Machado. It’s a direct contradiction.
The agent testified that Mercer Irwin said he hoped to get a “large payment” from a Ponzi scheme that he claimed ran from 2014 to 2020.
After being arrested in December 2020, she also claimed that up to 10 planes had fallen into the hands of drug smugglers, according to donor statements in two interviews.
“Are you saying he’s a liar?” prosecutor Leslie Brooks asked Mercer Irwin, pointing to one of the federal agents.
“I think he is an honest man,” said Mercer Irwin. “But he didn’t say that.”
Under cross-examination, Brooks discovered that Mercer Irwin’s company, the Aircraft Guaranty Corporation, had learned of possible forged passports and that up to 10 planes registered by her company had drug ties. After that, I asked why they hadn’t stepped up background checks on non-citizen trusts. Two of her planes were seized in Central America and found to be carrying over three tons of cocaine.
“What’s the magic number (of the plane) you have to catch in order to act?” Brooks asked.
Prosecutors have repeatedly alleged that Mercer Irwin and her company, Aircraft Guaranty, did not thoroughly scrutinize aliens on planes she placed in a non-citizen trust. As the owner, she claims she was unaware of the whereabouts of many of the aircraft.
In effect, prosecutors allege that she deliberately turned a blind eye to criminal activity involving the planes she registered.
Under U.S. law, aliens cannot obtain U.S. registration of aircraft. However, the FAA allows aliens to obtain U.S. registration of aircraft by transferring ownership to a trust company.
Brooks also repeatedly questioned Mercer Irwin about the third taped interview he had with federal agents when he was arrested in December 2020. The focus was on the escrow account of Wright Brothers Aircraft Title, Mercer-Erwin’s title company.
Machado paid a hefty escrow fee, ranging from $25,000 to $60,000, according to excerpts from taped interviews.
However, Mercer Irwin denied receiving a commission for Machado’s alleged illegal sale of planes.
“Are you saying you let Fred Machado use Escrow for free?” Brooks asked. “…do you want your account to be used for money laundering?”
Despite the agreement requiring written notice of withdrawal, Mercer Irwin claimed he gave Machado the authority to tell him when and where the lender would transfer money from the escrow account.
“He (Machado) was borrowing money from people, spending that money on everything, borrowing money from other people and paying it back,” explained Mercer-Irwin.
Brooks said such an arrangement would match the description of a Ponzi scheme.
“Is it a Ponzi scheme?” Brooks asked several times.
“I say so,” replied Mercer Irwin.
Brooks said only about 10 of the 190 transactions based on a secret ledger shared by Machado and Mercer Irwin appear to be legitimate aircraft sales.
A forensic accountant testified that Mercer Irwin poured $75 million into her alleged accomplice Machado from an escrow account for her Oklahoma City-based company, Wright Brothers Aircraft Title. Mercer-Erwin allegedly pocketed $4.9 million in escrow fees, according to accountants.
Prosecutors also said investors were deceived into what they purported to be low-risk, high-reward short-term loans. said to have been lost.
Investigators and prosecutors say a series of stories first aired by the WFAA in 2019 spurred a federal investigation that resulted in the indictments of Mercer Irwin, her daughter, Caylee Moffett, Machado and others. said.
Moffett pleaded guilty to wire transfer fraud and failing to properly report that the plane had been taken out of the country. She accepted her five-year probation contract.
Machado is an Argentinian international fugitive.
Closing arguments in Mercer-Erwin’s federal trial are scheduled for Monday.
https://www.wfaa.com/article/news/crime/owner-aircraft-trust-company-took-stand-claim-she-never-knowingly-registered-airplanes-on-behalf-drug-smugglers/287-95a570c6-c5ed-468d-8ba6-87e0f6d4d901 Onalaska Trial: Owners stand five hours on Friday