Eight indicted for transnational drug trafficking, money laundering Defendants connected to company located in Onalaska
From Enterprise Staff
A federal grand jury in the Eastern District of Texas has returned an indictment charging eight individuals with various federal violations related to a complex international drug trafficking conspiracy, announced acting United States Department of Justice Attorney Nicholas J. Ganjei. This investigation to date has led to indictments of individuals for transnational drug trafficking, money laundering, and financial crimes out of the Eastern District of Texas Federal Court related to a complex international drug trafficking conspiracy.
Debbie Mercer, 58, and Kayleigh Moffett, 33, both of Oklahoma City; Federico Machado, 53, of Florida; Carlos Villaurrutia, 40, of McAllen, Texas; and four others were named in an indictment charging them with conspiracy to manufacture and distribute cocaine, conspiracy to commit money laundering, conspiracy to commit wire fraud, conspiracy to commit export violations, and conspiracy to commit federal registration violations involving aircraft. The indictment details approximately $350 million in alleged criminal activity since 2016. The seven-count superseding indictment was returned by a federal grand jury earlier this week and unsealed recently.
According to unsealed court documents, the defendants allegedly purchased and illegally registered aircraft under foreign corporations and other individuals for export to other countries. The indictment specifically alleges that Mercer and Moffett, through their company Aircraft Guaranty Corporation (AGC), registered thousands of aircraft in Onalaska, a Polk County town without an airport.
According to the indictment, several of the illegally registered and exported aircraft were used by transnational criminal organizations in Colombia, Venezuela, Ecuador, Belize, Honduras, Guatemala, and Mexico to smuggle large quantities of cocaine destined for the United States. The indictment further alleges that illicit proceeds from the subsequent drug sales were then transported as bulk cash from the United States to Mexico and used to buy more aircraft and cocaine. According to the indictment, aircraft purchases were typically completed by wiring funds from casa de cambios and/or banks in Mexico to shell corporations operating in the United States as aircraft sellers/brokers.
In March 2019, Polk County Constable Precinct 1 Constable Scott Hughes and South East Texas
Export Investigation Group (SETEIG) Commander Beau Price received information regarding thousands of aircraft reported to be registered in Onalaska.
Price discussed this matter with Department of Commerce, Office of Export Enforcement, Bureau of Industry Security Special Agents as well as the Federal Aviation Administration (FAA) and a joint investigation was launched and is ongoing at this time.
“The threat posed by transnational crime cannot be overstated,” said Ganjei. “The use of United States-registered aircraft by these criminal organizations and their networks of associates poses a clear and present danger to the security of our nation. The American public can expect EDTX to be relentless in its fight against the sometimes invisible, but always dangerous, threat of transnational organized crime.”
This investigation became an Organized Crime Drug Enforcement Task Force (OCDETF) case and is being investigated by Homeland Security Investigations (Dallas, Brownsville and Laredo offices); Department of Commerce, Bureau of Industry and Security (Dallas and Houston offices); Department of Transportation Office of Inspector General (DOT-OIG); Internal Revenue Service; Federal Aviation Administration (FAA); Polk County Constable’s Office Precinct 1; SETEIG; Harris County District Attorney’s Office; and Harris County Constable’s Office Precinct 8. Also assisting in this investigation is Polk County Sheriff’s Office, Sheriff Byron Lyons and Texas Parks and Wildlife Game Warden David Johnson, Newton County Office Precinct 4 Constaple Howard Wonders.
“This investigation is a perfect example of local, state, and federal agencies working together in a task force setting. The amount of time, effort, and resources dedicated to this case by participating agencies is monumental,” said Price.
“Joint task force models that SETEIG is structured after has proven once again how efficient, effective and successful local, state and federal law enforcement can be investigating and prosecuting complex, sophisticated criminal organizations.” said Hughes.
Hughes went on to express his appreciation to all agencies involved and to point out it is not uncommon for even the most rural locations to be safe havens for large scale criminal
The indictment describes that foreign governments seized United States-registered aircraft containing multi-ton shipments of cocaine. According to the indictment, the aircraft were held in trust by AGC for the benefit of foreign corporations or individuals. The indictment identifies Machado, through his company South Aviation, and Villaurrutia, who used his companies TEXTON, TWA International, and Ford Electric, as aircraft sellers/brokers operating in the United States.
The indictment separately charges Mercer, Moffett, and Machado with engaging in a fraud scheme related to the acquisition of aircraft. According to the indictment, Machado recruited investors to invest in aircraft purchase deposits for sales transactions that never took place. Investors allegedly placed their funds in an escrow account held by Wright Brothers Title Company, which was owned and managed by Mercer and Moffett. Machado then allegedly used these funds for purposes other than the purchase of aircraft.
The case is being prosecuted by Assistant U.S. Attorneys Ernest Gonzalez, Colleen Bloss and Robert Wells. OCDETF is the largest anti-crime task force in the country and its mission is to disrupt and dismantle the most significant drug trafficking and transnational criminal organizations that threaten the United States. The prosecutor-led, intelligence-driven, multi-agency task forces leverage the authorities and expertise of federal, state, and local law enforcement.
“The indictments resulting from this highly complex investigation showcases HSI’s unique and far-reaching authorities, serving as an example of what the global law enforcement community can accomplish when we work together,” said Ryan L. Spradlin, Special Agent in Charge, HSI Dallas. “We were able to deliver a significant blow to the transnational criminal organizations around the world by exposing a money laundering and drug trafficking scheme perpetuated by sophisticated drug cartels.”
“As this case demonstrates, we will aggressively investigate the illegal exportation of aircraft contrary to U.S. national security interests,” said Trey McClish, Special Agent in Charge of the U.S. Department of Commerce, Bureau of Industry and Security – Office of Export Enforcement’s Dallas Field Office. “Alongside our Federal and State partners, OEE will leverage its unique criminal and administrative enforcement powers to detect and disrupt serious criminal schemes that violate U.S. export control law.”
“The indictment in this case demonstrate that individuals who choose to circumvent Federal regulations pertaining to aircraft registration and ownership will be pursued to the fullest extent of the law,” said Todd Damiani, Special Agent-In-Charge, Southern Region, U.S. Department of Transportation Office of Inspector General (DOT-OIG). “The collaborative nature of this investigation is representative of the ongoing investigative work DOT-OIG performs to ensure aviation safety and maintain national security interests in order to prevent the nefarious acts these defendants are being charged with from occurring.”
If convicted, the defendants face a minimum of 10 years and up to life in federal prison for the drug conspiracy charges and up to 20 years for the money laundering, export and wire fraud violations. It is important to note that a complaint, arrest, or indictment should not be considered as evidence of guilt and that all persons charged with a crime are presumed innocent until proven guilty beyond a reasonable doubt.
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