Beanie Baby creator Ty Warner to pay $53.5M penalty for tax evasion
BY ART GOLAB Staff Reporter September 18, 2013 10:36AM
Ty Warner, creator of Beanie Babies toys, will pay more than $53 million in fines in a tax evasion case, his lawyer said Wednesday. | 2003 photo~Getty
Updated: October 20, 2013 7:30AM
Beanie Babies billionaire Ty Warner will plead guilty to income tax evasion and pay a $53.5 million penalty for failing to report income he earned in a secret offshore bank account, according a statements from his lawyer and the U.S. Attorney’s office.
Warner allegedly stashed more than $90 million in a secret Swiss bank account in 2002, and failed to report earnings from that account of more than $3.1 million, according a charge filed Wednesday in federal court by the U.S. Attorney’s office in Chicago.
Prosecutors said Warner at first failed to pay $1.26 million in taxes on the unreported income, but an amended return reduced that amount to $885,000.
Leaving out the $3.1 million, Warner’s total reported income in 2002 was $49 million, prosecutors said.
While the fine will settle civil penalties, Warner, 69, could still face jail time at sentencing.
In a similar case, Skokie cemetery monument builder, 78-year-old Peter Troost, paid $1 million in back taxes and a $3.75 million fine and still was sentenced to a year in prison.
Booth Troost and Warner were among the thousands of Americans whose identities were revealed by their Swiss bank, UBS, after it was threatened with prosecution by U.S. authorities. In 2009, UBS turned over the names of 4,450 American clients and paid a $780 million fine.
Warner’s attorney Gregory Scandaglia said his client was charged even though he tried to enroll in a voluntary IRS offshore disclosure program in 2009.
“This is an unfortunate situation that Mr. Warner has been trying to resolve for several years now,” Scandaglia said. “Mr. Warner accepts full responsibility for his actions with this plea agreement.”
Warner is cooperating with the IRS, prosecutors said. He will be arraigned and enter his plea in federal court October 2.
“Regardless of wealth, everyone must pay taxes on all of their income, not just the amount they choose to report,” said Gary S. Shapiro, United States Attorney for the Northern District of Illinois.
Warner, 69, of Oak Brook, is CEO and sole owner of Westmont-based plush toy maker Ty Inc. A spokesman said the fine and plea would have no effect on the company.
Last week, Forbes’ listed Warner as No. 209 on its list of the 400 richest people in America with a net worth of $2.6 billion. He has donated more than $100 million of his fortune to charity.