Beanie Babies creator and Oak Brook resident Ty Warner has been charged with tax evasion after federal prosecutors said he withheld investment earnings from a Swiss bank account in 2002.
The 69-year-old toy tycoon is the sole owner of Ty Inc. based in Westmont, which manufactures the popular Beanie Babies plush toy line as well as other stuffed animal collectibles. His attorney, Gregory Scandaglia, said Warner has agreed to pay a $53.6 million civil penalty. He is slated for arraignment Oct. 2, prosecutors announced today.
"This is an unfortunate situation that Mr. Warner has been trying to resolve for several years now," Scandaglia said in a statement released Wednesday by his law firm. "Mr. Warner accepts full responsibility for his actions with this plea agreement."
Prosecutors said Warner omitted more than $3.1 million of investment income he made from a "secret offshore account" with Union Bank of Switzerland in 2002 and reported only $49.1 million in income that year. He transferred the assets of his UBS account -- with a balance of roughly $93.6 million -- to another Swiss bank in late 2002.
Warner is the second U.S. taxpayer charged in Chicago's federal court in connection with an ongoing investigation of U.S. taxpayer clients of UBS and other overseas banks that hid foreign accounts from the IRS, prosecutors said.
In early 2009, UBS entered into an agreement with the United States that allowed company officials to defer prosecution by admitting bank officials helped U.S. taxpayers hide accounts and funds from the IRS. As part of the agreement, UBS provided the identities and account information of certain U.S. customers, prosecutors said.
According to Forbes magazine, Warner's net worth is estimated at $2.6 billion, making him the 209th wealthiest American and 589th wealthiest person in the world.
If convicted, he faces a maximum sentence of five years in prison and a $250,000 fine.