The creator of Beanie Babies stuffed animals has been charged with federal tax evasion for allegedly failing to report income earned in a secret offshore account, and he's agreed to pay a more than $53 million penalty.
Prosecutors in Chicago announced charges Wednesday against H. Ty Warner. His attorney issued a statement saying the 69-year-old would plead guilty and would pay the penalty.
The office of the U.S. Attorney for the Northern District of Illinois, Gary S. Shapiro, said Warner's attorney
authorized the government to disclose that he is cooperating with the IRS.
According to court documents, Warner allegedly maintained a secret offshore account with the Switzerland-based financial services company, UBS, starting in 1996. Tax evasion carries a maximum penalty of five years in prison and a $250,000 fine.
Defense lawyer Gregory Scandaglia called the matter an "unfortunate situation" that Warner "has been trying to resolve for several years."
Warner lives suburban Chicago and is the sole owner of TY Inc. The company designs and sells plush toy animals, including Beanie Babies.
“Regardless of wealth, everyone must pay taxes on all of their income, not just the amount they choose to report. The charge alleges that Warner 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,” Shapiro said in a statement.
First published September 18 2013, 9:43 AM