A federal judge has ordered the former CEO of a commercial trucking insurance company to spend the next 18 months in prison and to pay more than $1.7 million in restitution for impeding the work of the IRS by lying under oath about her Cayman Islands businesses, which were used in a scheme to hide millions of dollars in secret offshore accounts.
Verna Cheryl Womack, 66, a Kansas City-area business woman with ties to the commercial trucking industry, was sentenced on Monday, July 17, by U.S. District Judge Gary A. Fenner to one year and six months in federal prison without parole. The court also ordered Womack to pay $1,704,421 in restitution to the IRS. A press release from the U.S. Attorney’s Office for the Western District of Missouri indicates Womack paid the restitution at the time of her sentencing.
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.
According to the news release, prosecutors allege that for two decades, Womack “engaged in a multi-faceted tax fraud involving offshore accounts designed to cheat the IRS.” That cheating involved numerous forms of concealment, including sham nominees and trusts as well as false statements made under oath.
Womack pleaded guilty last April to testifying falsely while under oath with the corrupt intent to impede the due administration of the Internal Revenue Code. 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.
The plea change came just 12 days after a judge issued a ruling that would have entered into evidence documents provided by Womack’s former business employee, Brandy Wheeler. 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 court documents, Womack orchestrated the creation of an intricate web of offshore accounts, trusts, nominees and shell companies to conceal millions of dollars in unreported income. She hid her ownership of shell companies and trusts in the Cayman Islands to conceal income earned in the United States, transfer it to the Cayman Islands, and grow it tax-free until she chose to repatriate it to the United States. Through her Cayman Islands companies, she owns condominiums on Grand Cayman and in Trump Tower in New York, which she purchased for $2.5 million.
Her business dealings in the Cayman Islands also allowed her to hide over $500,000 in income from the sale of her wine collection at auction. Since the mid-1990s, Womack maintained two wine cellars in her home in Mission Hills, Kan., that she used to store her personal collection of investment-grade wine. In March 2008 Womack sold approximately half of her wine collection through an auction house in New York for approximately $1.6 million but did not include the revenue from that wine sale on her 2008 tax return.
The lying under oath charge stems from a 2009 subpoena in which Womack was forced to testify in a civil enforcement action against Allen R. Davidson, her former tax adviser and business employee. Womack complied with the subpoena and testified under oath at a deposition on May 19, 2009, but admitted that she answered questions falsely and with the corrupt intent to impede the due administration of the Internal Revenue Code.
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