By Steve Vockrodt From Pitch

Something fishy is going on in the federal case against Mission Hills businesswoman Cheryl Womack, enough so that her scheduled change of plea hearing in court on Wednesday has been called off.

Instead, Womack’s attorneys and federal prosecutors will hold a hearing before a magistrate judge tomorrow morning. The hearing will presumably discuss why a piece of evidence in Womack’s case, one that her attorneys say is favorable to their client, has apparently been obscured by the Internal Revenue Service.

Womack was indicted almost a year ago on charges that she misled investigators who were looking into a network of offshore bank accounts, trusts and business entities that federal prosecutors allege were deployed to conceal income from the IRS. Womack was not charged with tax evasion, specifically, but federal prosecutors allege that her actions shielded her from $10 million worth of income taxes otherwise due to Uncle Sam. Womack, a native of Kansas City, Kansas, made a fortune in 2002 when she sold her trucking insurance companies for $35 million.

Womack at one point was supposed to go on trial the first week of November, but in October scheduled a change of plea hearing for Wednesday after having apparently worked out a deal with federal prosecutors.

But Womack’s attorneys now say their client can’t enter a plea unless they know all the evidence that the government has compiled. One of those pieces of evidence is what’s called a Tax Information Exchange Agreement. A TIEA is basically a contract between two countries that agree to cooperate on tax investigations. The IRS and the Cayman Islands (the small tax haven where Womack allegedly had bank accounts, a residence and incorporated business entities) struck such an agreement on Womack’s case in 2010.

Womack’s attorneys wanted to see the TIEA application that the IRS sent to the Cayman Islands.

According to a motion filed Monday by Cynthia Cordes, a Husch Blackwell lawyer representing Womack, federal prosecutors sent her on a wild goose chase through 90,000 documents of evidence that the Justice Department had assembled on Womack. When Womack’s attorneys said in January that they couldn’t find it, federal prosecutors told them to look again.

That’s when things get weird. After another exhaustive search produced nothing, federal prosecutors told Womack’s legal team that they would get a copy from the IRS. Then in March, Womack’s attorneys learned that the IRS was having trouble finding the document. On June 5, federal prosecutors told Womack that the IRS finally tracked down the TIEA, but that her attorneys couldn’t see it unless they agreed to a gag order that would forbid discussion of its contents. Womack’s legal team didn’t agree to the gag order but also didn’t press the disclosure of the TIEA agreement to avoid jeopardizing plea negotiations, according to the Monday filing. Besides, they thought, if the application contained information that was helpful to Womack, the government would have had to turn it over in any circumstance.

By October 22, both sides worked out a plea agreement that would have become public on Wednesday. Afterward, federal prosecutors said they wouldn’t reveal the TIEA file at all. After some more back-and-forth, Womack’s attorneys were allowed to look at the document last Thursday, but Womack couldn’t see the materials for herself, and her attorneys couldn’t take a copy with them or disclose what was in it. Based on what they saw, however, Womack’s attorneys say the information was helpful for their client, and that parts of the application were missing or redacted.

In any event, Womack’s attorneys worry that their client could get slapped with a harsher punishment under sentencing guidelines if federal prosecutors are allowed to use the information they obtained through the TIEA during sentencing.

Don Ledford, a spokesman with the U.S. Attorney’s Office in Kansas City, Missouri, says the government has no response to the filing.

IMAGE: Cheryl Womack headshot.jpg

For more on this story go to: http://www.pitch.com/FastPitch/archives/2014/11/11/cheryl-womacks-plea-hearing-scheduled-for-wednesday-is-cancelled

See also related iNews Cayman story with additional link “Did a former employee drop a dime on Cheryl Womack? Update:” at: http://www.ieyenews.com/wordpress/did-a-former-employee-drop-a-dime-on-cheryl-womack/