Beanie Babies creator to pay almost $53.6 million penalty after pleading guilty to tax evasion

By Mary Wisniewski, Reuters
Posted Sept. 18, 2013, at 3:03 p.m.

CHICAGO — The billionaire creator of Beanie Babies, Ty Warner, was charged Wednesday with tax evasion, agreed to plead guilty and pay a penalty of almost $53.6 million, according to prosecutors and his attorney.

Warner, 69, ranked as the 209th richest American by Forbes, “went to great lengths” to hide from his accountants and the Internal Revenue Service more than $3.1 million in foreign income generated in a secret Swiss bank account, according to the U.S. Attorney’s office in Chicago.

Warner has agreed to pay a civil penalty of $53,552,248 million for failure to file a Foreign Bank Account Report, according to a statement from Warner’s attorney Gregory Scandaglia.

“Mr. Warner accepts full responsibility for his actions with this plea agreement,” Scandaglia said.

Warner is the second taxpayer to be charged in federal court in Chicago in connection with an investigation of U.S. taxpayer clients of Union Bank of Switzerland and other overseas banks that hid foreign accounts from the IRS, according to prosecutors. As part of a 2009 agreement with the United States, UBS provided the government with the identities of certain customers, prosecutors said.

The federal charge alleges that in 2002, Warner earned more than $3.1 million through investments held in his UBS account, but he did not tell his accountants and failed to report it on his 2002 tax form. He failed to pay $885,300 in taxes owed for 2002, according to federal officials.

Beanie Babies, small plush toys sold for between $5 and $7, have been popular with collectors. During their peak of popularity in the 1990s, some collectors would pay hundreds of dollars for a rare character on the resale market, according to press accounts.

Warner’s net worth was listed this week by Forbes as $2.6 billion.

 

http://bangordailynews.com/2013/09/18/news/nation/beanie-babies-creator-to-pay-almost-53-6-million-penalty-after-pleading-guilty-to-tax-evasion/ printed on July 29, 2014