October 17, 2021

Womack sentenced to federal prison for lying under oath [about her Cayman Islands businesses]

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By James Dornbrook From Kansas City Business Journal

Kansas City businesswoman Cheryl Womack was sentenced to one year and six months in federal prison without parole and ordered to pay $1.7 million in restitution to the Internal Revenue Service.

Womack pleaded guilty in April 2016 to impeding an IRS investigation by lying under oath about her Cayman Island businesses. She was under investigation for tax evasion, accused of hiding millions of dollars in offshore accounts during a 20-year period. According to court documents, Womack failed to report her offshore holdings as required by law, in an effort to hide more than $6 million in income from the IRS.

“While Ms. Womack was not charged with tax evasion, she voluntarily tendered to the court over $1.7 million in restitution to conclude certain related tax concerns,” Womack’s attorney, J.R. Hobbs of Wyrsch Hobbs & Mirakian, said in an email statement. “She is deeply regretful about this situation. She is also very grateful to the scores of people throughout the community that have rallied behind her for these many years, dozens of whom submitted character letters to the court in support of her.”

Womack owned several businesses in the metro area, including an insurance company called National Association of Independent Truckers Inc., which sold in 2002 for about $35 million. She also had a venture capital firm called VCW Holding LLC.

Womack began her business dealings in the Cayman Islands in 1995, when she formed a reinsurance company called MFC Insurance Co. She opened bank accounts and created several trusts in the Cayman Islands in her name at the Bank of Butterfield in the Cayman Islands. Womack failed to disclose the accounts on her tax returns, using her Cayman Islands’ shell companies and trusts to evade reporting income to the IRS, prosecutors alleged.

In 2009, Womack was served with a subpoena to testify at a deposition in a civil enforcement action brought by the U.S. Department of Justice. The civil enforcement action sought to permanently enjoin Allen R. Davison from providing tax advice. Davison previously was Womack’s tax adviser and later her business employee. Womack complied with the subpoena and testified under oath at a deposition in May 2009 and then in April 2016 admitted to lying during that testimony.

For more on this story go to: https://www.bizjournals.com/kansascity/news/2017/07/17/womack-sentenced-to-federal-prison-for-lying-under.html

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