Ty Warner, part-time Montecito resident and all-around Beanie Babies billionaire, was charged Wednesday in a U.S. District Court in Chicago for allegedly failing to report money he earned in a Swiss bank account. He immediately struck a deal, agreeing to plead guilty to the tax evasion, resolve his back taxes, and pay a civil penalty of $53,552,248 for failing to report the Swiss account, according to a statement released by Warner’s attorney, Gregory Scandaglia.
Ty Warner Charged with Tax Evasion
Beanie Babies Billionaire Pleads Guilty, Agrees to Pay $53 Million for Not Reporting Swiss Account
Wednesday, September 18, 2013
Warner, who lives primarily in the Chicago suburb of Oak Brook, allegedly hid more than $3 million in foreign income accrued through his account with Union Bank of Switzerland (UBS), according to the United States Attorney’s Office of the Northern District of Illinois. As stated in the charging document, Warner first opened the account in 1996. Years later, in 2002, Warner allegedly moved money from that UBS account to another Swiss bank, with his account balance weighing in at more than $93 million. That same year, Warner netted the aforementioned $3 million through investments held in his UBS account. When he filed his 2002 form 1040, Warner, the government says, didn’t report the income or the account to the IRS, meaning he failed to pay more than $1.25 million in income tax. When Warner submitted an amended 2002 form in 2007, the amount in unpaid taxes was reduced to $885,300.
“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. “Mr. Warner accepts full responsibility for his actions with this plea agreement.”
The maximum punishments for the charges would have been five years in prison, a $250,000 fine, and multiple civil tax penalties. According to Forbes, Warner’s net worth tops $2.6 billion.