CHICAGO (CBS) — Millionaire businessman Ty Warner, the creator of Beanie Babies, has agreed to plead guilty to tax evasion charges, federal prosecutors said.
Warner was charged on Wednesday with federal tax evasion for allegedly failing to report income he earned in a secret offshore financial account he held with UBS, a global financial services firm headquartered in Switzerland.READ MORE: Protesters Say Benet Academy In Lisle Rescinded Lacrosse Coach's Job Offer Because She Is A Lesbian
Warner’s attorney Gregory Scandaglia said that Warner will plead guilty and pay a $53.5 million penalty.
“This is an unfortunate situation that Mr. Warner has been trying to resolve for several years now – including through an attempt to enroll in the IRS’s Offshore Voluntary Disclosure Program in 2009,” Scandaglia said in a statement. “Mr. Warner accepts full responsibility for his actions with this plea agreement.”
Warner, 69, of west suburban Oak Brook, is the sole owner of TY Inc., a Westmont-based company that designs and sells plush toy animals including Beanie Babies.READ MORE: Metallica Performs Surprise Show At The Metro
According to the charging document, Warner maintained a secret offshore account with UBS starting in 1996.
In late 2002, Warner transferred the assets in his UBS account to a second Swiss financial institution, Zürcher Kantonalbank, when the account had a balance of approximately $93,630,083.
In 2002, Warner earned approximately $3,161,788 in gross income through investments held in his UBS account, according to the charge.
Warner allegedly committed tax evasion for that year by failing to tell his accountants about that income and by failing to report that income or the existence of the UBS account in his 2002 form 1040 filed with the IRS in October 2003, as well as failing to report that same income on an amended 2002 form 1040 filed in November 2007.MORE NEWS: Chicago Weather: Cold Front On The Way
By omitting his UBS income, Warner falsely reported his total income in 2002 was $49,124,095, according to the charge.