Beanie Babies Creator Fined $80 Million
CHICAGO (CN) - Beanie Babies creator H. Ty Warner must pay $80 million in back taxes and fines and serve two years probation for failing to report $24 million in Swiss bank account income, federal prosecutors said.
Warner, 69, of Oak Brook, is the sole owner of TY Inc., which designs and sells Beanie Babies and other plush toys.
Warner's secret account with UBS dates back to January 1996, three years after the first nine Beanie Babies were introduced, the U.S. Attorney's Office said in a statement.
By 2002, the accounts held a balance of $93.6 million.
UBS then agreed to report certain tax information to the Internal Revenue Service. Warner's banker, Hansredi Schumacher, left UBS, and advised Warner to move his money to Zuercher Kantonalbank, which did not have an agreement with the IRS, prosecutors said.
Schumacher managed Warner's new account at Zuercher Kantonalbank. Schumacher who was indicted in Florida in 2008, accused of conspiring to defraud the United States.
Prosecutors estimate that Warner earned more than $24.4 million through investments in foreign accounts between 1999 and 2007, which he willfully failed to disclose, checking "no" next to the box on his tax forms asking if he held a foreign bank account.
Tax evasion is punishable by up to five years in prison.
In sentencing Warner to probation, U.S. District Judge Charles Kocoras said: "Society will be best served to allow [Warner] to continue his good works."
Kocoras also ordered Warner to do 500 hours of community service for Chicago high schools, and fined him $100,000.