Did a former employee drop a dime on Cheryl Womack? Update:
By Steve Vockrodt From Fast Pitch
Cheryl Womack is running out of time if she’s going to make her visit to the Cayman Islands for a New Year’s Eve party.
The forecast for New Year’s Eve in Kansas City is a high of 43. In the Cayman Islands, it’s 85.
Womack wants to fly to the Caribbean tax haven so she can ring in 2014 with that island’s politicians. The Mission Hills businesswoman thinks her appearance at the New Year’s Eve gathering and other meetings in January will help grease the skids for an environmental project she’s trying to get off the ground on in the Cayman Islands. Her project purports to turn municipal garbage otherwise headed to a landfill into ash and other things.
But Womack has a pesky problem – the well-known local business woman who sold her trucking insurance company for $35 million in 2002 lost her passport when federal officials indicted her earlier in December for an alleged $7 million tax fraud scheme. Her alleged crimes, which include charges that she lied t0 federal investigators, center heavily around her business dealings in the Cayman Islands.
No passport, no flight to the Caymans.
Womack’s attorney worked on Christmas Eve writing an emergency motion to try and get his client’s passport back in her hands so she can fly to the Caymans in January and make another business trip to India in February. That motion came one day after a federal judge agreed with federal prosecutors that Womack poses too much of a flight risk, despite offering up her Mission Hills home (appraised at $5.5 million) and the surrender value of her life insurance policy (nearly $800,000) as collateral.
In court filings, Womack’s attorney says that the government’s investigation against his client started no later than the date that a woman named Brandy Wheeler was pleaded guilty in 2008 for embezzling more than $1 million from a holding company that Womack runs. Wheeler could have gotten up to 30 years in prison for her crimes, but instead only got one year and one day, along with restitution, when she received her sentence in 2010.
That was after federal prosecutors asked a judge for leniency in Wheeler’s sentence. U.S. District Court Judge Fernando Gaitan said at Wheeler’s August 3, 2010 sentencing hearing that she had to go to prison for at least a little while, despite whatever help she had given to prosecutors to reduce her punishment.
“I think some time is required for this for this conduct because it’s serious conduct, notwithstanding what may happen to your boss as a consequence of her conduct,” Gaitan said.
While Gaitan didn’t name names, he may have been speaking about Womack. At least that’s what Womack’s attorney thinks.
“It was thus clear, at the time of Ms. Wheeler’s plea agreement, that she needed to provide ‘information’ sufficient to get someone indicted for something in order to substantially reduce the jail time she was facing for her admitted theft,” says Womack’s New York attorney Michael Levine in a court filing. “It was equally obvious that the only person who would be attractive to the government in that regard was her boss, Ms. Womack.”
Levine goes on to say that Womack knew the feds were on her trail since 2008, all the while making foreign business trips and always returning to Kansas City. On October 18, Womack and her attorneys watched a power point presentation given by a federal prosecutor that explained the evidence the feds had gathered about Womack’s alleged tax dodging ways. The prosecutor made a deal (the details of which aren’t specified in the public record), adding that if Womack didn’t take it, she would be indicted by the end of 2013.
Womack didn’t take the offer and was charged on December 11, four days before the statute of limitations expired on some of the counts against her. She gave up her passport to the feds five days after her indictment. That proves to her to her attorney that Womack is not a flight risk; she had five days to grab a flight and hightail it out of the country and didn’t.
The feds, however, weren’t impressed by her offer of her home and life insurance as collateral. They say that Womack’s home, despite its $5.5 million appraisal, would probably fetch less in a U.S. Marshall’s auction. They also think Womack may have evaded $10 million in taxes, up from their previous allegation that it was $7 million.
Womack’s attorney is taking his chances with the Eighth Circuit Court of Appeals to try and get Womack’s passport back. As of Monday morning, the court has not made a decision.
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UPDATED: From PITCH
Cheryl Womack will spend New Year’s Eve (and the foreseeable future) in Kansas City after all
Posted by Steve Vockrodt on Tue, Dec 31, 2013 at 1:26 PM
The sunny beaches of one of the world’s most notorious tax havens will have to wait for some other day for Cheryl Womack.
A feverish effort to appeal a federal judge’s decision to shackle the indicted businesswoman from Mission Hills fell on deaf ears late Monday.
Another federal judge rejected Womack’s appeal to get her passport back in time to make a jaunt to the Cayman Islands for a New Year’s Eve gathering. Womack said she needed to go to the Caribbean island to glad-hand newly elected officials there in hopes of starting some garbage-to-energy project in the Cayman Islands.
The Cayman Islands don’t directly tax its citizens or companies and have strict banking secrecy laws, which make the British territory attractive to drug dealers and tax cheats.
Without explanation, a federal judge denied Womack’s appeal. An earlier ruling surmised that Womack could carry out her mission by way of video conferencing.
Womack was popped on December 11 for what the government alleges was a $10 million tax fraud that investigators believe was perpetrated in part through her business interests and bank accounts in the Cayman Islands. People who come under the thumb of the Justice Department often lose their passport while their legal issues get sorted out. The indictment, the charges of which have not yet been tested in court, has cast a pall on the career of one of Kansas City’s better-known businesswomen.
According to a lengthy online resume, Womack was the third oldest among 11 siblings from Kansas City, Kansas. The Wyandotte High School (and later, University of Kansas) graduate was making $17,000 a year at an insurance company when she was 33 years old. She got tired of pulling that kind of wage and started her own company, the National Association of Independent Truckers, in 1981. That company sold in 2002 for $35 million. Afterward, Womack got into venture capital and nonprofit foundation management and fundraising, among other things.
But the Justice Department has investigated Womack since 2008 on the suspicion that she raked in unreported income through a byzantine maze of offshore bank accounts and business entities primarily in the Cayman Islands.
Authorities don’t want her traveling there, or anywhere abroad. Womack has a residence in the Caymans and is considered a permanent resident there, a distinction that requires her to live a certain number of days on the island.
It’s not clear if she will return there anytime soon, or at all.
For more on this story go to:
http://www.pitch.com/FastPitch/archives/2013/12/31/cheryl-womack-will-spend-new-years-eve-and-the-foreseeable-future-in-kansas-city-after-all
