A federal judge admonishes the IRS in the Cheryl Womack case
Regular Pitch readers know that key elements of the ongoing criminal tax case against Mission Hills businesswoman Cheryl Womack rest on how the government obtained evidence against her.
Womack remains under an indictment issued by a federal grand jury in 2013 that accuses the self-made millionaire of misleading government investigators about her income and her taxes.
Ever since Womack almost copped a plea with federal prosecutors last year but suddenly backed out of the arrangement, Womack’s attorneys have attempted, with some success, to make dents in the government’s case.
The latest was a March 31 order by federal Judge Sarah Hays, who flicked away a request by prosecutors to keep certain information in the Womack case shielded from public view.
Prosecutors had asked to keep private some details of how investigators obtained evidence against Womack from the Cayman Islands, the tax haven where the government claimed Womack sent some of her income so that she didn’t have to report it on her IRS returns.
Specifically, prosecutors wanted to obscure the communications that U.S. investigators had with Cayman Islands authorities with respect to Womack’s tax situation, claiming that public disclosure would harm relations between the two countries.
But Womack’s attorneys had a former Justice Department attorney poke holes in that theory during a February hearing. Nathan Hichman, a former assistant U.S. attorney general, saw where U.S. investigators had misrepresented the nature of Womack’s alleged crimes to Cayman Islands authorities.
Hichman testified that federal investigators had told Cayman Islands authorities that they were pursuing a tax-evasion case against Womack, even though the IRS had never referred a tax-evasion case to the Justice Department.
The feds have publicly couched Womack’s case as a tax-evasion matter since the very beginning, even though the charges against her amount to alleged crimes of lesser magnitude. When the charges against Womack were announced in 2013, U.S. Attorney Tammy Dickinson used the term “tax evasion” in the press release, even though Womack wasn’t brought up on those charges.
Hays, the federal judge, seemed to side with Womack on this matter. Hays ruled that the IRS can’t keep information private just because it’s embarrassing to the IRS.
“It appears to the court to be in the self-interest of the IRS that these inaccuracies not be publicly disclosed,” Hays wrote. “It is not the policy of this court to hide from the public the errors, whether they be negligent or deliberate, of government agencies.”
Meanwhile, federal prosecutors beat back at claims that it bolstered its case against Womack on illegally obtained evidence.
Back in March, The Pitch reported that Womack’s attorneys wanted to get rid of evidence against Womack that had been served up to the feds by a former employee of Womack’s.
They claimed in court that Brandy Wheeler, a comptroller for VCW Holdings (a company owned by Womack), and her brother had purloined information off Womack’s business computers without authorization. Wheeler in 2008 was busted for embezzling money from VCW (which stands for Verna Cheryl Womack).
Wheeler got a light sentence for the crime because she became the government’s star witness, flipping over key evidence against Womack. Womack’s attorneys thought this evidence should be thrown out before the case makes it to a jury.
But in recent filings, federal prosecutors in Kansas City say it’s nobody’s fault but Womack’s that she allowed an employee who was on her way out of the company to have access to sensitive company data.
