Ty Warner, CEO of Ty Inc., creator of Beanie Babies, has agreed to settle a federal tax evasion, according to a Wall Street Journal report. Warner will pay $53.6 million in penalties and may also face a prison sentence.
Warner was charged on Wednesday, Sept. 18, for failing to report income earned in a secret offshore account, which he started with Swiss bank UBS in 1996, according to the report. He then moved it to another Swiss bank, Zürcher Kantonalbank, in 2002, under the name Molani Foundation.
His defense lawyer, Gregory Scandaglia, of Scandaglia & Ryan in Chicago, said that Warner “accepts full responsibility for his actions,” and that Warner attempted to file an Offshore Voluntary Disclosure Program for people with undeclared offshore accounts with the IRS in 2009 but was rejected. “He came forward voluntarily, unaware that he might be under government scrutiny,” said Scandaglia.
The 69-year-old Beanie Babies creator started Ty in 1985 and soon had an empire on his hands when the collectible dolls took off in the 1990s, which made Warner a billionaire.
Warner’s case is the latest in some high-profile cases of undeclared offshore accounts, including ones that involve UBS. The Swiss bank admitted to helping American taxpayers hide money abroad in 2009, gave U.S. authorities more than 4,000 names and paid a $780 million penalty to avoid any criminal charges.
Tax evasion can carry a sentence of up to five years in prison and a $250,000 fine