Ex truck insurance CEO Womack pleads guilty to impeding IRS

By Greg Grisolano, Land Line associate editor | Wednesday, April 06, 2016

The former CEO of commercial trucking insurance company has pleaded guilty in federal court to one count of impeding the work of the IRS by lying under oath about her foreign business interests.

Verna Cheryl Womack, 65, a Kansas City-area business woman with ties to the commercial trucking industry, entered her plea on Tuesday, April 5, in federal court in Kansas City, Mo. The plea change comes just 12 days after U.S. Magistrate Judge Sarah W. Hays issued a ruling on a motion made by Womack’s legal team to suppress evidence that came from documents stolen by Womack’s former business employee, Brandy Wheeler. The judge’s ruling effectively allowed most of the documents and computer files to be admitted as evidence in Womack’s upcoming trial. Attorneys for the defendant argued the evidence was obtained via an illegal search and seizure.

Wheeler pleaded guilty in 2008 to embezzling more than $1 million from Womack’s business, and gave the documents to federal investigators in hopes of a lighter sentence for her own crimes, according to a report in The Kansas City Business Journal.

Womack was facing a 10-count indictment that includes one count of attempting to interfere with administration of internal revenue laws, and nine counts of material false statements to a government agency, according to documents on file in U.S. District Court for the Western District of Missouri.

The indictment was returned on Dec. 12, and the taxes owed are estimated to be more than $7 million. By pleading guilty, Womack admitted that she testified falsely while under oath with the corrupt intent to impede the due administration of the Internal Revenue Code, according to a release from the U.S. Attorney’s Office. She faces up to two years in prison without parole, and a fine of up to $25,000.

Womack was formerly the CEO of the National Association of Independent Truckers, which sold liability insurance to independent truckers. She founded the business in the 1980s and cashed out for more than $35 million when she sold the business in 2002. She then started her own venture capital firm, VCW Holding LLC.

The indictment against Womack states that beginning in or about 1996 and continuing to the date of the indictment, she “corruptly endeavored … to obstruct and impede the due administration of the internal revenue laws of the United States.”

Womack opened a series of bank accounts and nominee companies and trusts in the Cayman Islands to conceal a portion of her income from the IRS. The indictment further alleges that Womack established at least 19 accounts at various banks in the Caymans. For the calendar years 2005 through 2008, Womack maintained balances between $40,964 and $173,541 in one of those accounts, but failed to report her financial interests to the IRS.

According to a news release from the U.S. Attorney, Womack was served with a subpoena in 2009 to testify at a deposition in a civil enforcement action to permanently enjoin Allen R. Davison from providing tax advice. Davison had previously served as Womack’s tax advisor and later as her business employee.

Womack complied with the subpoena and testified under oath at a deposition on May 19, 2009. Her admission of guilt refers to her answering questions at that deposition falsely, and “with the corrupt intent to impede the due administration of the Internal Revenue Code.”

Federal prosecutors will argue at Womack’s sentencing hearing that Womack’s criminal conduct resulted in a significant tax loss, which is relevant for determining an appropriate sentence, the news release stated. Prosecutors say the court will determine whether the tax loss is relevant to sentencing in this case. If it is, the court will determine whether Womack’s conduct resulted in a criminal tax loss and, if so, in what amount and the impact that any tax loss may have on determining the sentence.
 
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