Creator of Beanie Babies Pleads Guilty to Tax Evasion

more+
less-
more+
less-

H. Ty Warner, the creator of Beanie Babies pleaded guilty to offshore tax evasion today. Mr. Warner has agreed to plead guilty to a single count of tax evasion and to pay a $53 million FBAR penalty. Despite his cooperation with the Department of Justice, tax evasion carries a maximum sentence of five years and Mr. Warner may still face jail time. Mr Warner must also pay the costs for the prosecution and a 75 percent civil fraud penalty.

Mr. Warner, with a net worthy of almost $2.6 billion in 2012, is one of the wealthiest individuals to face tax evasion charges. According to the DOJ, Mr. Warner failed to report almost $3.2 million dollars of 2002 income from Swiss bank account with UBS (with a balance of over $93 million) to the IRS or his accountants. The IRS also maintains that he took pains to hide these accounts. Mr. Warner initially failed to pay $1.25 million in income taxes, but an amended 2002 income tax return filed in 2007 reduced that liability to just under $900,000. The amended return also failed to disclose his Swiss accounts.

Mr. Warner tried unsuccessfully to enroll in the IRS’s 2009 Offshore Voluntary Disclosure Program (OVDP) but was turned down because he was already the subject of an IRS investigation at that time.

Topics:  FBAR, Guilty Pleas, OVDP, Tax Evasion

Published In: Criminal Law Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© M. Robinson & Company, P.C. | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »