Kansas City area businesswoman Cheryl Womack admits to lying in federal tax probe

One of the Kansas City area’s most successful and well-known businesswomen pleaded guilty Tuesday to a federal criminal charge related to her business dealings in the Cayman Islands.

V. Cheryl Womack of Mission Hills pleaded guilty in U.S. District Court in Kansas City to attempting to interfere with the administration of U.S. internal revenue laws.

Womack admitted that she lied during a 2009 deposition about her interests in two Cayman Islands businesses — JoJoDi Insurance Co. of Cayman and Lucy Limited.

Federal prosecutors alleged that those entities were used to help shield part of Womack’s income from the Internal Revenue Service. Womack did not admit to that allegation.

At sentencing, U.S. District Judge Gary Fenner will determine what amount of taxes, if any, the government lost and whether the loss is relevant to the count to which Womack pleaded guilty.

The criminal case against Womack, 65, has been pending since December 2013, when she was charged in a 10-count federal grand jury indictment.

In exchange for her guilty plea Tuesday, prosecutors agreed to dismiss the nine other counts of making a false statement to a government agency.

Under terms of the plea agreement, defense attorney Cynthia Cordes will argue for probation, while prosecutors can seek a sentence of up to two years in federal prison.

“This was an unfortunate prosecution,” Cordes said in a written statement released after Tuesday’s court hearing. “Cheryl Womack accepts responsibility for the two false statements that the government obtained from her. However, the government wasted innumerable resources in their pursuit of a headline and spent years investigating a crime victim.”

The investigation that led to the charges against Womack began after she reported that a former employee had embezzled from one of her companies, according to previously filed federal court documents.

After that employee pleaded guilty, she provided investigators with information about Womack’s overseas accounts, according to the documents.

A separate civil investigation by the Department of Justice into the dealings of a tax adviser for Womack and others led to the charge that she pleaded guilty to Tuesday.

Womack admitted Tuesday that during her deposition in that case, she testified that she didn’t know when the JoJoDi company had been started when in fact she had caused it to be started in 1997.

When asked about the ownership of Lucy Limited, she falsely said it was owned by a group of investors, when she knew there were no such investors.

At sentencing, federal prosecutors said they will argue that Womack’s conduct resulted in a “significant tax loss.” They will also argue that it is relevant for determining an appropriate sentence.

Womack’s lawyers will be free to argue that if there was a tax loss to the government it was not the result of criminal conduct and that it is not relevant to what sentence she should receive.

A self-made multimillionaire and entrepreneur, Womack grew up in Kansas City, Kan., one of 11 children of a Panamanian immigrant father. She graduated from Wyandotte High School and the University of Kansas, where she earned a degree in education.

After a brief teaching stint she began working in the insurance industry. In the early 1980s she founded the National Association of Independent Truckers.

According to prosecutors, she sold the business in 2002 for $35 million.

She subsequently operated a venture capital firm and headed an effort to encourage female entrepreneurs around the world.

Womack also is well known for supporting charities and University of Kansas athletics programs.

Her Mission Hills home most recently appraised at $5,677,800, according to Johnson County property records. Prosecutors say Womack also maintained a condominium in the Cayman Islands and another at Trump Tower in New York, where one-bedroom units begin at more than $2 million.

Womack will remain free on bond while sentencing is pending.

This story was originally published April 5, 2016 at 3:34 PM with the headline "Kansas City area businesswoman Cheryl Womack admits to lying in federal tax probe."