Chip,

Can you see that your original post seems so obviously self serving that it begs the question is this real?

You mentioned that someone could find themselves in Federal detention for this but I've never heard of that and you haven't provided any evidence that it's happened.

Your input on BT is very insightful and helpful so I mean no disrespect. You have special talents and I learn from you all the time. But I always look at why is he saying this when I come across new info.

Can you point to a case where a dealer (or owner) was sent to the crossbar hotel for these crimes just for selling a plane to a bad actor, as opposed to being actively engaged in the underlying crime?

Jim, now I’m curious...
If you’re paying $400,000 cash for a new airplane, do you wire the money and wait for the Seller to give you a Bill of sale after your money is in his account?

If you’re the seller of your $400,000 plane, do you give the Buyer a signed Bill of Sale and then wait for your money?

Or, guy shows up with cash, hands you the money, you sign the Bill of sale...done. But he takes off and yard darts the plane into a school bus. Attorneys look up the aircraft owner on the day of the crash... that’s you according to the FAA. Nothing a $10k check written to your attorney can’t fix.

I’m just curious how people without escrow do it.... I mean...I’m not handing over the money without a bill of sale. And I’m not releasing the plane, as a seller, until there is a FAA stamped bill of sale. The only way to do that is with a 3rd party holding the money and a legally binding list of ‘to dos’.

I share a tremendous amount of insight and information on here and have several clients who have found us through Beechtalk. I love the forumn, love the discussion and I have learned a lot here. It has been good for our business and I do pay so that I can share openly about our services...
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However, I have nothing to gain in this instance because we do not represent sellers.

I am simply trying to share knowledge, I feel kind of bad that I didn’t think about this sooner.

I will also add that this is rarely a piston problem, the cartels are usually buying turbine aircraft for obvious reasons.

You’re at a lot less risk selling a Baron than a King Air.

I see a couple of references to “faa stamped bill of sale”. I must confess that I’ve never seen one, of course, I’m kind of a newbie having only owned two dozen aircraft at this point. Where would one obtain such a document, and what would be the advantage of having one?

As antiquated as it seems, there’s actually a window at the FAA (or so I hear, I’ve never actually been there) and you hand them the Bill of Sale to be stamped. At that moment, the aircraft and it’s associated liability is transferred.

Previously stipulated that I don't take cash, but for <1% to do with this reason and 99% because it's a physical security risk and giant pain in the ass.

Not taking sides, though I am not lucky enough to be in the "If I loose $10k, it's no big deal" camp...

Friend of mine was selling a nice C182 decades ago. At the time, he was leasing it to the FBI for surveillance duty, but it wasn't doing any better than just paying the bills, and he had other uses for the money. So, one day, he calls and asks if I'd pick up another guy to act as a translator, and fly to Juarez to show it to a potential customer. Of course, that seemed very odd to me that the buyer couldn't just drive across to the US side to look at it, but I was told some story about how that wasn't possible.

Flew the translator to CJS, waited an hour for potential buyer to show, finally a big Lincoln limo drives up with blacked out windows, and a nice, older Mexican man came over and spoke to us. He asked to fly the plane for a bit, so we (me, translator and buyer rep) hopped in for a short flight over south Juarez. I could immediately tell this gentleman knew airplanes and was VERY experienced. You can just tell by the way they handle the controls and the plane. We returned to CJS, they left, we filed, and returned to ELP. Then the translator told me who the character was....

So I looked up the FBI pilots soon as I got back on the ramp at ELP, and they both laughed out loud. They thought it funny because they knew EXACTLY which airplane to be on the lookout for, since they had a couple hundred hours in it.

That was the last I had to do with the deal, and the last time I agreed to fly ANYTHING to Mexico for anybody.

Thanks Jim....
Well...if you’re ever selling a plane and Bolivians offer you full price and don’t want to see the plane before buying.... do it my way, not your way!

Sound advice, to be sure!

I support Chip in his advice and his efforts. There are a number of buyers and owners who what to save a few bucks and cut corners. Instead of writing/executing Purchase Agreements and using an escrow account to hold all the money and all the paperwork, they decide to show up to the airport, hand the owner a check and then fly the aircraft away. It makes no difference if this is a piston or turbine aircraft.

I work quite a bit with AIC Title and there were issues a few years ago (possibly STILL an issue) involving banks that financed aircraft only to have the funds transferred to an offshore account and no clean transfer of ownership. I think Chips point is valid in that there are no 100% solutions. Money laundering by its very nature is very complex (shell companies within shell companies, etc.) and while transactions may seem simple and straightforward on the surface, having someone else look over the paperwork BEFORE funds are transferred is not a bad idea. When things go wrong, I bet the person who funded the deal is not thinking about how much money they saved by cutting corners.

Know your customer - yes! However, it is more important to use a process that tends to produce a successful outcome and this normally involves the use of an escrow agent, a Purchase Agreement and some type of prebuy inspection. Again, there are no 100% guarantees but the escrow company will want to obtain Closing Instructions from both parties - and this is where the problems may be uncovered. If payment is being made to XYZ LLC's bank account versus John Smith (the registered owner of the aircraft), it may/should raise a flag with the escrow agent.

There is also the question about title insurance. There is only one company that provides aircraft title insurance and quite honestly, I don't know how they would address this type of problem.

I will investigate and respond.

GREAT discussion!

I use Insured Aircraft Title Service when I buy or sell. One other thing that is important to watch out for is the source of funds. The name on the registration application should match the wire transfer source. If it does not, there had better be a way to verify the buyer and source of funds are legally connected. In my business running a Jaguar Land Rover car dealership, we are always on the alert for this. If there is no match, there is no sale and we request the originator reverse the wire.

Mike and Sven are right, the title company gets to see where funds are coming from and going to prior to transfer.

Red Flag number 1

Incoming wire transfer from multiple accounts / banks.

The excuse is typically, “you know it’s Mexico, no one keeps one million dollars in one bank”

Maybe true, but more often than not they are hoping the smaller amounts won’t attract as much attention.

I am a newbie on this forum, but am a 30+ year veteran aircraft dealer/broker. I have known Chip for years. I appreciate the message Chip is trying to covey here. He is a prolific contributor with a wealth of knowledge to share. Earning his living selling aircraft and being on this forum is self serving, but it is also serving the members well. Free knowledge is a bargain!

(I know the dealers that went to jail or currently are in jail for dirty aircraft deals that Chip mentions. Chip is right not to mention who they are. But I do not know of anyone doing it right and going to jail because the buyer was a crook.)

Here is a short story. Although I concentrate mainly in jets and turboprops, I have sold countless pistons over the years. In one case, in 2004 I sold a Cirrus SR-22 to a U.S. citizen of Mexican origin with "friends" tagging along that were Mexican citizens. I always use a title company. AeroSpace Reports is my choice, but most of them do a great job. I also took a photocopy of his Texas driver license, used contracts, and he wired the purchase price to escrow. Other than the heavy accents and one of the "friends" having a "I'm too cool to even look at you" attitude, nothing was out of the ordinary as I have sold many aircraft to Mexican citizens.

Fast forward two months. A friend from my church who happens to be a Federal DEA agent walked in my front door one day. I greeted him warmly, he responded like Sargent Friday - just the facts, sir. Uh oh. He wanted to see my file on the Cirrus deal. I had kept everything, including the wire transfer confirmation, which turned out to be key information. They used the information to back-track and arrest 9 of a known 12 drug dealers that used the Cirrus to haul cocaine and pot into Texas. That "too Cool" guy was the kingpin. I was never called upon to testify but the paper work proved to be priceless.

The lessons of this story: 1) drug dealers will use anything that flies, 2) always use a title service, wire transfers, and contracts - even for the 152 deal, 3) keep photocopies of everything, 4) use the SDN list but this is no guarantee that the buyer isn't a bad guy because the buyer above wasn't the on the list - but I bet his too-cool friend was - I didn't check because he wasn't the customer. Too Cool was obviously using his "friend" to buy the aircraft.

I am not a lawyer so none of this counts, but here goes anyway. Nothing you can do will absolutely protect you from a bad guy trying to launder money or do some other illegal thing with the aircraft you are selling. But by doing all of the above, you will go a long way to prove you are one of the good guys. If you do all of the above, I believe the worst that will happen is that you have to testify, but I would consider that a duty (if not downright fun) if it means a drug dealer goes to jail.

Do you know if they removed the parachute to increase the useful load?

Very interesting first post, David. Welcome aboard BeechTalk!