Ty Warner Pleads Guilty To Tax Evasion

H. Ty Warner, the man behind Beanie Babies, plead guilty to tax evasion in U.S. District Court.  Warner owes the government $53.6M in failure to file penalties and offshore account penalties, the largest offshore-account penalty ever reported and now will face up to five years in prison.

Federal prosecutors have said that Warner failed to report $24.4 million in offshore accounts for over a decade. The indictment alleges that in 1996 Warner traveled to Zurich to open up an account with UBS with the intent to “evade and defeat” taxes on more than $3.1M in foreign income generated in this Swiss bank account.

Warner plead guilty to the failure to pay taxes on $3.2 M of earnings in 2002.  According to federal prosecutors, in 2002, Warner earned approximately $3.1M of gross income through investments held in a UBS account; Warner failed to tell his accountants about that income and failed to report that income or the existence of the UBS bank account in his 2002 tax return.  Warner continued to hide this account by failing to report this income on his amended 2002 tax return filed in 2007.