September 24, 2013
Beanie Baby Founder to Pay $33.5 Million for Tax Evasion
Who would’ve thought that someone able to create such sweet and loveable toys would also plead guilty to tax evasion? That’s just what millionaire businessman, Ty Warner, the creator of Beanie Babies, did on Wednesday.
Warner was charged with federal tax evasion for failing to report income he earned in a secret offshore financial account he held with UBS, a global financial services firm headquartered in Switzerland.
Gregory Scandaglia, Warner’s attorney, said that Warner will plead guilty and pay a $53.5 million penalty.
“This is an unfortunate situation that Mr. Warner has been trying to resolve for several years now – including through an attempt to enroll in the IRS’s Offshore Voluntary Disclosure Program in 2009,” Scandaglia said in a statement. “Mr. Warner accepts full responsibility for his actions with this plea agreement.”
According to the charging document, Warner opened his offshore account with UBS in 1996. In 2002, Warner began transferring assets from his UBS account to Zurcher Kantonalbank, a Swiss financial institution, when the account had a balance of $93,630,083.
Apparently Warner failed to tell his accountants about that income and failed to report the existence of the UBS account in his 2002 Form 1040 filed with the IRS as well as failing to report that same income on an amended 2002 Form 1040.