Beanie Babies creator Ty Warner to admit tax evasion

Beanie Babies on store shelf Beanie Babies were particularly popular in the 90s

Related Stories

The billionaire creator of Beanie Babies toys could face up to five years in prison after agreeing to admit a charge of tax evasion.

Federal prosecutors said that Ty Warner "went to great lengths" to hide more than $3m (£1.9m) of income in a secret Swiss bank account.

Mr Warner's lawyer said his client had agreed to pay a $53m fine.

The 69-year-old Illinois tycoon's net worth is estimated by Forbes at $2.6bn, ranking him the 209th richest American.

Mr Warner's attorney, Gregory Scandaglia, said his client accepted "full responsibility for his actions with this plea agreement".

"This is an unfortunate situation that Mr Warner has been trying to resolve for several years now," Mr Scandaglia told the Associated Press.

February 2003 photo of Ty Warner at a toy fair in New York Ty Warner is a failed actor who invested all he had in Ty Inc, which made his fortune

The charges come as a result of a clampdown by US authorities on its citizens hiding money abroad to avoid paying tax - particularly in Switzerland.

It is alleged that Mr Warner, who also has a reputation for philanthropy, set up a Swiss bank account in 1996 with the UBS financial services company.

He failed to tell his accountants or the US tax authorities about the existence of the account, according to a press release by the US Attorney's office in Chicago.

The prosecutor's statement did not mention a $53m fine.

Beanie Babies are a soft toy, popular in the 1990s, that sell for between $5 and $7.

Allen Adamson, from the branding firm Landor Associates, said the toy company could be affected by the "negative buzz" of the case.

"It's so jarring because this product feels so sweet, so innocent," he said.

However, branding expert Laura Ries, of Ries & Ries, disagreed.

"People may not buy [a Beanie Babies toy] because it's not as cool as it was. But I don't think consumers care the owner didn't pay his taxes and is in big legal trouble."

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

BBC Business Live

  1.  
    BANK OF ENGLAND 09:35: Breaking News

    Bank of England policymakers discussed whether there was a case to raise interest rates but once again voted unanimously to hold them at 0.5% in July. They remain concerned about low wage growth, it seems. And they also still fear choking off the economic recovery, according to the minutes which have just been released.

     
  2.  
    CENTRICA CEO 09:24:

    Iain Conn, the group managing director for refining and marketing at BP, is on a shortlist of one to replace Sam Laidlaw, the present chief executive of Centrica, reports BBC Business Editor Kamal Ahmed. Mr Conn's confirmation in the role could come as soon as next week.

     
  3.  
    BANK OF ENGLAND 09:10:
    the Bank of England

    Bank of England policymaker Paul Fisher, who has just stood down after five years on the Monetary Policy Committee, has given an interview to the Independent, in which he claims the Bank delivered the economic recovery. Mr Fisher defends the decision to slash interest rates to 0.5% and launch quantitative easing. He also pays tribute to the "tremendous" efforts of Bank of England staff "who really did pull all the stops out to try to turn the economy round". The minutes of July's MPC meeting are out at 09:30 and will be pawed over for clues as to the timing of a possible interest rate rise.

     
  4.  
    MARKET UPDATE 08:54:

    Europe's main stock markets are flat today without a clear sense of direction as investors digest the continuing conflicts in Gaza and Ukraine and their potential impact. The biggest rise on the FTSE 100 is Capita - up 1.13%, or 13p, to 1,168p - following its trading update this morning.

    • The FTSE 100 is 0.15% higher at 6805.50
    • Germany's Dax is higher by 0.41% at 9773.77
    • France's Cac-40 is up 0.14% at 4375.73
     
  5.  
    COMMONWEALTH BUSINESS 08:40:
    A swimmer practices using a snorkel during a training session at the Tollcross International Swimming Centre

    The Queen attends the opening ceremony of the Commonwealth Games in Glasgow tonight. But before all that there is the Commonwealth Business Conference. The event will focus on issues and opportunities common to all Commonwealth countries, including employment and skills, infrastructure development, improving financial services for business and the development of the smart cities of the future.

     
  6.  
  7.  
    MARKET UPDATE 08:24:

    Japan's Nikkei stock average closed down 0.1% to 15,328.56 as the Tokyo markets kept their focus on tensions in Gaza and the Middle East. Meanwhile, MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5% after earlier pushing to a three-year peak. It moved in tandem with the S&P 500, which hit a new high overnight as traders turned their attention to positive corporate earnings.

     
  8.  
    TOUR DE FRANCE Via Twitter James Baker Councillor

    The economic benefits of Yorkshire hosting the opening stages of the Tour de France a fortnight ago are being called into question by James Baker, a local councillor for Warley ward on Calderdale Council in West Yorkshire. He tweets: "Interesting getting some feedback that Tour de France weekend wasn't great for some local businesses and takings were down for some." That's slightly at odds with the £100m estimated economic benefit the county was expecting.

     
  9.  
    BHP BILLITON 07:54:
    Ore

    BHP Billiton posted record annual iron ore production in Western Australia for the fourteenth consecutive year, while Queensland coal production also hit an all-time high. Rival mining giant Rio Tinto last week said its iron ore production and shipments surged to record highs in the first-half of the year as it boosted output despite a recent fall in commodity prices.

     
  10.  
    PAYPAL LENDER 07:39: BBC Radio 4
    A general view of the home page of PayPal.

    Online payments firm Paypal is to begin offering loans to small businesses. The loans will be in the form of cash advances and will be repayable when those small businesses make sales, it has said. Rupert Keeley, chief executive of PayPal Europe has told Radio 4's Today programme the firm hasn't set interest rates for these loans yet, but claims "they are going to be very competitive indeed". He adds businesses can set how much and how quickly they repay the loans.

     
  11.  
    ISRAEL FLIGHTS 07:25:
    British Airways (BA) Airbus A380 comes in to land at Heathrow airport

    Indefatigable British Airways has said it will continue to fly into Ben Gurion international airport in Tel Aviv despite most airlines deciding to cancel flights into the Israeli capital. All US airlines and most European flights into Israel have been halted after a rocket fired from Gaza landed one mile away from the airport. US airlines were stopped by the Federal Aviation Authority from landing in Tel Aviv for 24 hours.

     
  12.  
    CAPITA EARNINGS 07:10:

    Capita says "underlying" profit before tax for the first six months of the year rose 16% to £238m. However, if you factor in things like acquisition costs and reductions in the value of its assets, it's a drop in profit to £152.3m from £157.5m. Still, dividend is up 10.3% to 9.6 p.

     
  13.  
    RUSSIAN SANCTIONS 06:51: BBC Radio 4
    Vladimir Putin

    More from Mr Grodzki on Russian sanctions: He says the Russian economy is very resilient to sanctions and Russia is virtually self-sufficient. It can sell its oil elsewhere in the world - it recently signed a deal with China - and he says France cancelling defence contracts may even boost the Russian economy and Russian jobs.

     
  14.  
    RUSSIAN SANCTIONS 06:41: BBC Radio 4

    Georg Grodzki has now popped up on the Today programme, again talking about sanctions against Russia. He says: "It's very difficult to impose sanctions on a country that needs healthy relations with the West less than the West needs healthy relations with it." He adds Russian can buys the goods they want to from elsewhere. They would prefer to buy goods from the West but if they can't, they will live with it, he says.

     
  15.  
    RUSSIAN BONDS 06:33: Radio 5 live

    Russia cancelled one of its weekly bond sales yesterday, its first in three months, citing "unfavourable market conditions." On 5 live we have Georg Grodzki, formerly of Legal & General, telling us why. Sometimes governments realise they don't need the money he says, but this time that isn't the case. Russia's borrowing costs, which are about 4.6% for five year bonds - already high - have only got worse in recent days, he says.

     
  16.  
    TAX 06:23: Radio 5 live

    "Everyone should pay taxes at a flat rate from the first dollar," says Arthur Laffer, a former adviser to Ronald Reagan on 5 live. People like to avoid tax, he says, and taxing everyone the same should help stop gaming the system, he says. Does that mean taxing the poor the same? Yes, he says. Do you reward tax dodgers then? "They pay the tax rather than doing the dodges," he says.

     
  17.  
    ROYAL MAIL 06:11: Radio 5 live

    James Bevan of CCLA Investment Management is back on 5 live talking this time about Royal Mail's performance. Their annual shareholder meeting is on Thursday and he wants to hear more about the French antitrust case they, TNT and FedEx are involved in. Royal Mail has received notice from French competition authorities over a possible breach of antitrust law by one of its subsidiaries, which could result in a fine for the recently privatised group.

     
  18.  
    TESCO SHARES 06:01: Radio 5 live

    Tesco shares were down yesterday, but when it was announced they were losing their chief executive, the shares rose. How come? James Bevan, chief investment officer at CCLA Investment Management is explaining what he thinks on 5 live. "When Philip Clarke was let go there was also a profit warning," he says. "For that to drive the share price up seemed absolutely mad."

     
  19.  
    06:00: Howard Mustoe Business reporter

    Hello! You can, as ever, get in touch with your views and experiences via email bizlivepage@bbc.co.uk and via twitter @BBCBusiness.

     
  20.  
    06:00: Matthew West Business Reporter

    Good morning everyone. We've had Microsoft second quarter earnings overnight - they were bad - as well as Apple - good- flights into Israel have been halted and there's a row over Russian sanctions to contend with. the morning is only just getting started.

     

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.