Beanie Babies creator pleads guilty to tax evasion

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Ty Warner, American billionaire and founder of popular '90s toy Beanie Babies, will plead guilty to tax evasion and agree to a penalty of $53.5m

Warner, 69, could face up to five years in jail for hiding more than $3m in a secret offshore account with Swiss bank UBS.

According to the charging document, Warner opened the UBS account in 1996, and in 2002, he moved $93m to Swiss bank Zürcher Kantonalbank. That account produced over $3m of income in 2002 alone, which he failed to mention to the US tax authority, the Internal Revenue Service (IRS). In 2007 he amended his 2002 return but still omitted the Swiss account. The case claims this amounts to $885,300 in unpaid taxes.

He has said he issued a guilty plea to one count of tax evasion.

“Regardless of wealth, everyone must pay taxes on all of their income, not just the amount they choose to report,"said Gary Shapiro, United States Attorney for the Northern District of Illinois. "The charge alleges that Warner went to great lengths to hide from his accountants and the IRS more than $3.1m in foreign income generated in a secret Swiss account. Such conduct invites federal prosecution."

Warner is the 209th richest man in the US, according to Forbes, but is not listed in the top 400 in terms of tax payments. His net worth is estimated at $2.6bn.

Beanie Babies are a line of stuffed toys the popularity of which reached fever pitch in the mid-90s, even spawning a monthly magazine called Mary Beth’s Bean Bag World.

Last month, Switzerland announced a landmark deal with the US government to end a long-running dispute over banks that help US tax evaders.

The news came following increased pressure on Switzerland due to series of corporate scandals. Swiss bank UBS was fined a record £160m over its handling of the Libor interbank lending rate. And the country's oldest private bank shut its doors after pleading guilty in January to helping wealthy Americans avoid tax.

Raymond Doherty

 

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