Beanie Babies billionaire H. Ty Warner gets 2 years probation - New York News

Beanie Babies billionaire gets 2 years probation for tax evasion

Posted: Updated:
CHICAGO (Sun-Times Media Wire) -

Billionaire Beanie Baby creator Ty Warner has been sentenced to two years of probation and 500 hours of community service for hiding tens of millions of dollars from the taxman in a secret Swiss bank account, the Sun-Times reports.

The 69-year-old plush toy magnate was handed the sentence Tuesday morning by U.S. District Judge Charles Kocoras, who said "society will be best served by allowing him to continue to do his good works."

Kocoras noted that Warner had done a great deal for charities and said he balanced that against his misdeeds.

Warner, a self-made billionaire who started his toy business at his Hinsdale condo in the 1990s, tearfully plead guilty late last year to tax evasion under a deal which required him to pay a $53 million civil penalty and $16 million in back taxes. He was also fined $100,000 by the judge.

He faced a potential maximum of 5 years behind bars,

His lawyers pointed to his troubled childhood, charity work and efforts to come clean as a tax cheat — and more than 70 letters written to the judge by supporters.

But prosecutors said in court filings ahead of Tuesday's sentencing hearing that Warner is a "shrewd and successful businessman" who could "comfortably afford to pay the approximately $5.5 million in taxes that he evaded, but he instead made a conscious effort year after year, for more than a decade, to file false tax returns under reporting his income."

They wanted him locked up — at least for a year.

Warner, whose $2.6 billion fortune made him the 209th richest American last year according to Forbes magazine, for years hid millions in a UBS bank account in Switzerland. Though other tax evaders who used identical accounts escaped prosecution after they enrolled in Internal Revenue Service amnesty programs and paid their back taxes and penalties, Warner was denied that opportunity when UBS shared his name with U.S. authorities, his attorney Gregory J. Scandaglia said.

Even among those that were prosecuted, most were spared prison, Scandaglia wrote in a court filing that noted one Florida woman who used a Swiss UBS account to evade taxes was sentenced to just 5 seconds of probation.

Warner's supporters also pointed to a recent report by the IRS's ombudsman that was critical of the harshness with which the IRS goes after some tax evaders who use offshore accounts.

But prosecutors had plenty of examples of less wealthy tax evaders who had been locked up for using the secret UBS accounts.

They included Scrooge-like Skokie gravestone business owner Peter Troost — a mere millionaire — who was last year sentenced to a year behind bars for an almost identical crime involving far smaller sums.

Warner was "telling the Court what he thinks he needs to say in order to appear to the Court to be open, honest, and ashamed," prosecutors wrote.

They added, "Unfortunately, the glaring omission of an honest explanation for the crime seems to be a continuation of his Swiss bank scheme: secretive and calculating."

And they added that they still don't know what Warner's motive was for hiding the cash, given he could easily have paid the taxes he dodged.

"Either he dodged more than $5,000,000 in taxes out of greed, or he had some reason to hide the source of the moneys which funded his Swiss accounts," they wrote.


Feds: Beanie Babies creator should do prison time

Beanie Babies creator to pay $53M penalty in tax evasion case

Follow Us!

Share Your Photos & Video

Powered by WorldNow
Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | New Terms of Service What's new | Ad Choices