Beanie Babies Creator Charged With Federal Tax Evasion

H. Ty Warner plans to plead guilty to the charge

Wednesday, Sep 18, 2013  |  Updated 1:16 PM CDT
View Comments (
)
|
Email
|
Print
Chicago PlayFest

Getty Images

NEW YORK - FEBRUARY 16: Ty Warner, creator of Beanie Babies toys, signs autographs in a rare appearance to celebrate the 10th anniversary of the Beanie Babies toy line at the American International Toy Fair February 16, 2003 at the Jacob K. Javits Convention Center in New York City. The Toy Fair, a New York institution in February for 100 years, continues through February 20. (Photo by Chris Hondros/Getty Images)

advertisement
Photos and Videos
More Photos and Videos

The Illinois-based creator of Beanie Babies was charged Wednesday for allegedly failing to report earnings from a secret offshore bank account.

H. Ty Warner, owner of the Westmont company that designs and sells the plush toys, plans to plead guilty to federal tax evasion and will pay a $53.5 million civil penalty, his lawyer said.

“This is an unfortunate situation that Mr. Warner has been trying to resolve for several years now," Warner’s attorney, Gregory Scandaglia, said, "including through an attempt to enroll in the IRS’s Offshore Voluntary Disclosure Program in 2009. Mr. Warner accepts full responsibility for his actions with this plea agreement.”

Prosecutors said Warner maintained a secret offshore account with UBS starting in 1996 then transferred the assets in 2002 to a second Swiss financial institution. The account's balance at the time was about $93,630,083.

Warner allegedly earned $3.1 million through investments held in his UBS account and he allegedly failed to tell his accountants about the income.

“Regardless of wealth, everyone must pay taxes on all of their income, not just the amount they choose to report," Gary S. Shapiro, United States Attorney for the Northern District of Illinois, said in a statement.

Shapiro said Warner allegedly "went to great lengths to hide from his accountants and the IRS more than $3.1 million in foreign income generated in a secret Swiss account."

"Such conduct invites federal prosecution,” he said, noting Warner is the second person charged in federal court in Chicago in connection with an investigation of U.S. clients of Union Bank of Switzerland (UBS) and other overseas banks hiding foreign accounts from the Internal Revenue Service. 

Shapiro says tax evasion carries a maximum penalty of five years in prison and a $250,000 fine.

Get the latest headlines sent to your inbox!
View Comments (
)
|
Email
|
Print
Leave Comments
What's New
Get Our Weather App
Stay ahead of the storm with the NBC... Read more
Follow Us
Sign up to receive news and updates that matter to you.
Send Us Your Story Tips
Check Out