Federal Judge Dismisses Jet Seizure Case After Texas Fails to Prove Export Violations
A U.S. district court judge dismissed a case involving the seizure of a multimillion-dollar jet after Texas officials failed to prove the jet violated export regulations or was involved in a money-laundering scheme. Texas police seized the British Aerospace BAE 125 Series jet last year on tax evasion and money-laundering charges and suggested the owners violated the Export Administration Regulations, but a judge said police had no evidence or probable cause.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
“Again, there is no evidence, beyond suspicion, stacked on suspicion, that the Aircraft was purchased with proceeds derived from criminal activities,” Judge Kenneth Hoyt at the U.S. District Court for the Southern District of Texas said in a May 4 order. “Moreover, there is no evidence, beyond mere suspicion, that the state of Texas is owed taxes, or that the Aircraft is being, or will be, exported for sale, and somehow deprive the State of sales taxes.” The case was dismissed with prejudice.
The Texas police officer who seized the jet, Capt. Beau Price of the Precinct 1 Constable's Office in Polk County, Texas, said the seizure was part of a “joint investigation” with the Commerce Department’s Bureau of Industry and Security into illegal exports of U.S.-registered aircraft. In an October affidavit, Price said the plane was part of a tax evasion and money-laundering scheme and said BIS suspected the plane of violating the EAR. Price -- who works with BIS as part of the South East Texas Export Investigation Group (SETEIG), a local-federal task force -- also said the plane’s owners didn’t file the required Electronic Export Information in the Automated Export System. Price said the plane should have been forfeited to the state of Texas. Such proceeds fund SETEIG activities and Price’s salary.
But the judge said Price and Harris County district attorneys failed to prove that the plane was or would be exported and didn’t provide evidence for the other accusations. “Speaking more specifically and to the point, the pleading and affidavit do not provide evidence of drug smuggling or aviation smuggling,” Hoyt wrote. The judge also noted BIS agents turned the plane over to local police instead of investigating the plane themselves, which suggests BIS didn’t think an investigation was worthwhile.
“The record shows that the Aircraft was in the hands of federal authorities, the BIS, for a period of time. Nevertheless, the federal government did not proceed against the Aircraft or its recorded owners,” the judge wrote. “Had there been evidence of the Aircraft’s involvement in criminal activities or questionable ownership, registration and operations of the Aircraft, surely the federal government would not have released the Aircraft and would have canceled its [Federal Aviation Administration] registration.” A BIS spokesperson referred questions to SETEIG. Price and Polk County Precinct 1 Constable Scott Hughes, who oversees SETEIG, didn’t comment. A spokesperson for the Harris County District Attorney’s Office declined to comment because they said the matter is still "under review by federal authorities."
Price and SETEIG were also involved in at least two other cases this year involving asset forfeitures and alleged export violations (see 2102190040). A court in March granted Texas attorneys’ motion to dismiss one of the cases involving Price’s seizure of industrial oilfield equipment after telling a federal court that “further prosecution wasn't financially justified.” Another case involving a 2005 Raytheon Aircraft Co. Hawker 800XP jet is still ongoing.