Beanie Babies creator Ty Warner avoids prison for tax evasion

Ty Warner, creator of Beanie Babies toys, signs autographs in a rare appearance in 2003 Ty Warner, a college drop out, created the popular Beanie Babies toys

Related Stories

The billionaire creator of Beanie Babies toys has avoided prison for hiding millions of dollars from US tax authorities in a Swiss bank account.

Ty Warner was sentenced in a Chicago federal court to two years probation and 500 hours of community service.

He could have faced up to five years in prison after having pleaded guilty to a single count of tax evasion.

The 69-year-old had apologised ahead of the hearing, saying he felt "shame and embarrassment" for his actions.

"I never realised the biggest mistake of my life would cost me the respect of those closest to me," Mr Warner said.

US prosecutors had accused Mr Warner of hiding $25m (£15m) in a secret bank account in Switzerland, starting in 1996, and filing false tax returns.

Following the charges, Mr Warner struck a deal with prosecutors in October where he pleaded guilty to a single count of tax evasion.

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

The businessman, who owns toymaker Ty Inc and Ty Warner Hotels and Resorts, then paid a $53m fine, one of the largest civil penalties ever levied.

He also agreed to pay millions of dollars in back taxes and interest, and filed amended income tax returns for the years 1999 to 2008.

Beanie babies

The Illinois tycoon had a poor and unhappy childhood, according to his lawyers.

After failing at acting, he invested his money in a toy company that created Beanie Babies, small plush toys in the shape of bears and other animals.

They became immensely popular in the mid-1990s and created a fortune for Mr Warner, who is worth an estimated $2.6bn according to Forbes.

Start Quote

The perception cannot be that a wealthy felon can just write a check and not face further punishment”

End Quote Michelle Petersen Assistant US attorney

Lawyers representing Mr Warner said he had led a "law-abiding life" and had also donated $140m in cash and toys to various charities and organisations.

The US has been cracking down on offshore tax crimes, and more than 100 people have been prosecuted during the past five years.

A prosecutor has asked US District Judge Charles Kocoras to give Warren at least a year behind bars.

"The perception cannot be that a wealthy felon can just write a check and not face further punishment," assistant US attorney Michelle Petersen said.

But Mr Kocoras opted against prison time, saying Mr Warner's philanthropy and "endless acts of kindness" trumped his criminal acts.

"Society will be better served by allowing him to continue his good works," Mr Kocoras said.

More on This Story

Related Stories

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

More Business stories


Business Live

    07:27: AGA profits
    AGA Rangemaster

    AGA Rangemaster has reported slight fall in an annual pre-tax profit to £700,000, compared with £1.1m a year earlier. It has also announced it will not be paying a dividend to shareholders.

    DFS shares Via Twitter

    Retail analyst Nick Bubb tweets: The Chairman of DFS trumpets that it stands for "Dedication, Family and Success". Or Dull Furniture Sale? ;-) @NickBubb1

    07:15: DFS shares

    Buy one, get one half price! Furniture retailer DFS has priced shares at 255p - at the lower end of expectations. The stock starts trading at 0800 today and means the company will be valued at close to £550m.

    07:02: Eurozone outlook BBC Radio 4

    One thing that may help the eurozone economy is a small but significant accomplishment by the ECB that appears to have gone largely unnoticed. That was last Autumn's asset quality review of the banks, by the ECB which "gave pretty much everybody a clean bill of help", says Mr Cameron Watt. "And that's allowing banks to sell assets off their balance sheets."

    Greek economy Via Twitter Adam Parsons Business Correspondent

    Former Greek shipping minister @MVarvitsiotis tells #WUTM "we'll do whatever it stay in Eurozone...leaving would be a disaster" @AdamParsons1

    06:47: Eurozone outlook BBC Radio 4

    Mr Cameron Watt tells Today: "There is a following wind which is the lower oil price and the material decline in the currency [euro] against the dollar". He says those factors should help boost the eurozone economy, although he he sceptical that it will do as well as ECB president Mario Draghi (pictured) suggested at his press conference on Thursday.

    06:35: ECB bond buying BBC Radio 4
    The EURO logo is pictured in front of the former headquarter of the European Central Bank

    We're talking quantitative easing (QE) on the Today programme and why it pushes up stock markets. And Ewan Cameron Watt, global chief investment strategist at BlackRock, explains in the most clear terms. It is all about portfolio substitution, of course. "If I buy a whole lot of bonds and give you cash, you have now have to invest that cash," he says. "You don't want to buy bonds because of [current] negative yields, so it forces you to buy riskier assets, which inflates the prices of things like equities." Simples.

    06:25: Alpacas! Radio 5 live

    Let's face it - alpacas are a bit weird. But farming the cuddly critters appears to appeal to some who want to escape the rat race, alpaca farmer Mary-Jo Smith tells Wake Up to Money. She says alpaca wool is strong, luxurious and "just amazing to wear". The British Alpaca Society holds its annual show in Telford this weekend.

    06:15: Insurers v banks Radio 5 live

    Aviva shares ended 7% higher yesterday and Ewen Cameron Watt, chief investment strategist at BlackRock, tells Wake Up to Money it is no surprise that insurers are doing better than banks. He says operating conditions for banks are getting tougher, but some insurers are opting to join forces.

    06:05: Rangers FC
    A general view of the Ibrox Stadium, in Glasgow,

    It's a big day for Rangers FC as the club holds an emergency meeting where Dave King hopes to oust the board. However, there are question marks over King - who wants to become chairman - because of his convictions in South Africa for tax offences.

    06:03: Matthew West Business Reporter

    Happy Friday everyone. Don't forget you can get in touch by email at or via twitter @bbcbusiness.

    06:00: It's Friday Chris Johnston Business Reporter

    Good morning and welcome to the last day of the working week. US unemployment figures are set to dominate the day and are out at 13:30. We'll bring you the reaction to those numbers and all the day's other business news as well.



Try our new site and tell us what you think. Learn more
Take me there

Copyright © 2015 BBC. 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.