Beanie Babies boss pleads guilty to tax evasion
All of the stuffed animals in the world wouldnt make a $53.6 million fine and five years in prison sting less.
October 03, 2013 at 07:10 AM
4 minute read
The original version of this story was published on Law.com
All of the stuffed animals in the world wouldn't make this sting less: The creator of Beanie Babies pled guilty to federal tax evasion on Oct. 2, claiming he hid millions in offshore bank accounts.
Ty Warner, the CEO of Ty Inc., now faces up to five years in federal prison and owes the government $53.6 million in fines for failing to file taxes on foreign financial accounts. That sum now becomes the largest offshore banking penalty is American history.
“I apologize for my conduct,” the 69-year old Warner said in U.S. District Court in Chicago. “I made a mistake. I'm fully responsible.”
Warner pleaded guilty to hiding $3.2 million in Swiss bank UBS AG in 2002, according to court documents. But prosecutors said Warner's real evasion was much bigger, as he hid a total of $24.4 million in profits overseas, hiding the sum from even business and personal accountants.
The U.S. government has recently cracked down on offshore bank accounts through the Foreign Account Tax Compliance Act (FATCA), originally passed in 2010. The new trend, which started with investigations into UBS and Credit Suisse between 2009 and 2011, will soon be ramped up even further as a FATCA provision comes into effect in 2014. The new provision will require foreign financial institutions to report information about their U.S. account holders to the Internal Revenue Service, making it even tougher to hide money abroad.
But for now, Warner remains the standard-bearer. “I'm pleading guilty because I am guilty,” Warner said in court, according to the Chicago Tribune. His official sentencing will occur on Jan. 15, 2014. In the meantime, he is free on individual recognizance.
All of the stuffed animals in the world wouldn't make this sting less: The creator of Beanie Babies pled guilty to federal tax evasion on Oct. 2, claiming he hid millions in offshore bank accounts.
Ty Warner, the CEO of Ty Inc., now faces up to five years in federal prison and owes the government $53.6 million in fines for failing to file taxes on foreign financial accounts. That sum now becomes the largest offshore banking penalty is American history.
“I apologize for my conduct,” the 69-year old Warner said in U.S. District Court in Chicago. “I made a mistake. I'm fully responsible.”
Warner pleaded guilty to hiding $3.2 million in Swiss bank
The U.S. government has recently cracked down on offshore bank accounts through the Foreign Account Tax Compliance Act (FATCA), originally passed in 2010. The new trend, which started with investigations into UBS and Credit Suisse between 2009 and 2011, will soon be ramped up even further as a FATCA provision comes into effect in 2014. The new provision will require foreign financial institutions to report information about their U.S. account holders to the Internal Revenue Service, making it even tougher to hide money abroad.
But for now, Warner remains the standard-bearer. “I'm pleading guilty because I am guilty,” Warner said in court, according to the Chicago Tribune. His official sentencing will occur on Jan. 15, 2014. In the meantime, he is free on individual recognizance.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllTrending Stories
- 1Data Breaches in UK Legal Sector Surge, According to ICO Data
- 2PayPal Faces New Round of Claims; This Time Alleging Its 'Honey' Browser Extension Cheated Consumers
- 3Fired NLRB Member Seeks Reinstatement, Challenges President's Removal Power
- 4NY Inspector General Announces Attorneys Hired to Lead Upstate Region and Gaming
- 5Carol-Lisa Phillips to Rise to Broward Chief Judge as Jack Tuter Weighs Next Move
Who Got The Work
J. Brugh Lower of Gibbons has entered an appearance for industrial equipment supplier Devco Corporation in a pending trademark infringement lawsuit. The suit, accusing the defendant of selling knock-off Graco products, was filed Dec. 18 in New Jersey District Court by Rivkin Radler on behalf of Graco Inc. and Graco Minnesota. The case, assigned to U.S. District Judge Zahid N. Quraishi, is 3:24-cv-11294, Graco Inc. et al v. Devco Corporation.
Who Got The Work
Rebecca Maller-Stein and Kent A. Yalowitz of Arnold & Porter Kaye Scholer have entered their appearances for Hanaco Venture Capital and its executives, Lior Prosor and David Frankel, in a pending securities lawsuit. The action, filed on Dec. 24 in New York Southern District Court by Zell, Aron & Co. on behalf of Goldeneye Advisors, accuses the defendants of negligently and fraudulently managing the plaintiff's $1 million investment. The case, assigned to U.S. District Judge Vernon S. Broderick, is 1:24-cv-09918, Goldeneye Advisors, LLC v. Hanaco Venture Capital, Ltd. et al.
Who Got The Work
Attorneys from A&O Shearman has stepped in as defense counsel for Toronto-Dominion Bank and other defendants in a pending securities class action. The suit, filed Dec. 11 in New York Southern District Court by Bleichmar Fonti & Auld, accuses the defendants of concealing the bank's 'pervasive' deficiencies in regards to its compliance with the Bank Secrecy Act and the quality of its anti-money laundering controls. The case, assigned to U.S. District Judge Arun Subramanian, is 1:24-cv-09445, Gonzalez v. The Toronto-Dominion Bank et al.
Who Got The Work
Crown Castle International, a Pennsylvania company providing shared communications infrastructure, has turned to Luke D. Wolf of Gordon Rees Scully Mansukhani to fend off a pending breach-of-contract lawsuit. The court action, filed Nov. 25 in Michigan Eastern District Court by Hooper Hathaway PC on behalf of The Town Residences LLC, accuses Crown Castle of failing to transfer approximately $30,000 in utility payments from T-Mobile in breach of a roof-top lease and assignment agreement. The case, assigned to U.S. District Judge Susan K. Declercq, is 2:24-cv-13131, The Town Residences LLC v. T-Mobile US, Inc. et al.
Who Got The Work
Wilfred P. Coronato and Daniel M. Schwartz of McCarter & English have stepped in as defense counsel to Electrolux Home Products Inc. in a pending product liability lawsuit. The court action, filed Nov. 26 in New York Eastern District Court by Poulos Lopiccolo PC and Nagel Rice LLP on behalf of David Stern, alleges that the defendant's refrigerators’ drawers and shelving repeatedly break and fall apart within months after purchase. The case, assigned to U.S. District Judge Joan M. Azrack, is 2:24-cv-08204, Stern v. Electrolux Home Products, Inc.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250