Beanie Babies billionaire could get prison time
H. Ty Warner, the billionaire who created Beanie Babies, arrives at federal court for sentencing on Tuesday, Jan. 14, 2014, in Chicago. Last year Warner pleaded guilty to one count of tax evasion for hiding $25 million in income in secret Swiss bank accounts. (AP Photo/Andrew A. Nelles)
CHICAGO - H. Ty Warner, the billionaire creator of Beanie Babies, appeared in a Chicago federal courtroom on Tuesday to be sentenced for tax evasion.
Warner pleaded guilty to a single charge last year for evading taxes on $25 million in income he had stashed away in Swiss bank accounts. He appeared anxious as he waited for Tuesday's proceedings to begin, rubbing his hands staring down as he sat at the defence table.
Warner, 69, could get up to five years in prison. When he entered his plea, U.S. District Judge Charles Kocoras promised him he would get time at his sentencing to apologize for his actions.
Defence lawyers asked that Warner be sentenced to probation only, not prison, pointing to the toy magnate's unhappy childhood and charity work. Prosecutors acknowledged his philanthropy in a court filing, but added that, "Charity is not a get-out-jail card."
Warner is among the highest-profile targets in the federal government's push to prosecute Americans concealing income from the IRS overseas, often in Switzerland. Prosecutors say at one point, Warner was concealing as much as $107 million.
Beanie Babies first appeared in the mid-1990s, triggering a craze that generated hundreds of millions of dollars for Westmont, Ill.-based TY Inc., of which Warner is the sole owner. Forbes recently put his net worth at $2.6 billion.
The small, plush toys have heart-shaped name tags and are made to resemble bears and other animals. Some are designed to look like cartoon or comic book characters. As collectibles, some fetch thousands of dollars.
Warner maintained a secret offshore account starting in 1996 with the Switzerland-based financial services company UBS. He earned $3.1 million in gross income in 2002 through the account, but didn't report it, prosecutors say.