Mission Hills Woman Pleads Guilty to Impeding the IRS by Lying about Cayman Islands Businesses
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Mission Hills, Kan., woman pleaded guilty in federal court today to impeding the work of the IRS by lying under oath about her Cayman Islands businesses.
Verna Cheryl Womack, 65, of Mission Hills, pleaded guilty before U.S. District Judge Gary A. Fenner to the charge contained in a Dec. 12, 2013, federal indictment.
By pleading guilty today, Womack admitted that she testified falsely while under oath with the corrupt intent to impede the due administration of the Internal Revenue Code.
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. This civil enforcement action sought 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. Womack admitted today that she answered questions falsely and with the corrupt intent to impede the due administration of the Internal Revenue Code.
During the deposition, the Dept. of Justice attorney asked Womack if she knew when a company called JoJoDi Insurance Company of Cayman was started. Instead of answering truthfully, Womack responded to the question by falsely stating that she did not know when JoJoDi was started. In fact, she knew that she had personally caused it to be started in 1997.
During the deposition, the Dept. of Justice attorney also asked Womack who owned Lucy Limited, another Cayman Islands business. Womack was the settlor and 1/3 beneficiary of the trust that owned Lucy Limited. Instead of answering truthfully, however, Womack falsely stated that Lucy Limited was owned by a group of investors. In fact, she knew that there were no such investors. Womack knew that she had caused the creation of both Lucy Limited and the trust that owned Lucy Limited.
Among its assets, according to the indictment, Lucy Limited owned (as nominee for Womack) a wine collection that was stored in the basement of Womack’s Mission Hills residence. Womack used a credit card issued by the Bank of Butterfield (in Grand Cayman) in the name of Lucy Limited to purchase at least part of the wine for her collection, the indictment says. On March 15, 2008, Womack sold approximately half of the wine stored in her basement at an auction house in New York for $1.6 million.
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. However, the court will determine whether the tax loss is relevant to sentencing in this case, and if it is, 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.
Under the terms of today’s plea agreement, Womack will be sentenced to up to two years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorneys Brian P. Casey and Daniel M. Nelson. It was investigated by IRS-Criminal Investigation and the FBI.