Beanie Babies maker avoids prison for tax evasion

Published on NewsOK Modified: January 14, 2014 at 7:29 pm •  Published: January 14, 2014
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CHICAGO (AP) — The billionaire businessman behind Beanie Babies learned Tuesday that he won't go to prison for hiding at least $25 million from U.S. tax authorities, and the judge who gave him two years' probation instead went to great lengths to praise his charitable giving.

H. Ty Warner, one of the highest profile figures snared in a federal investigation of Americans using Swiss bank accounts to avoid U.S. taxes, issued a brief apology before he was sentenced in Chicago federal court. The toymaker, who pleaded guilty to a single count of tax evasion, said he felt "shame and embarrassment" for what he had done.

Warner, 69, could have been sentenced to up to five years in prison, and a prosecutor Michelle Petersen asked U.S. District Judge Charles Kocoras to give Warner at least a year behind bars.

Peterson detailed how Warner meticulously hid his income — more than $100 million at one point — by filing false tax returns for at least 11 years, and pointed out that another area businessman caught in the same dragnet, Peter Troost, got a year in prison from another judge in that courthouse for hiding far less — $3 million.

"(Without prison time), tax evasion becomes little more than a bad investment," Petersen told the judge. "The perception cannot be that a wealthy felon can just write a check and not face further punishment."

Kocoras, though, opted against prison time, and he devoted most of the 20 minutes he spent explaining his sentence praising Warner's charitable work.

"Society will be better served by allowing him to continue his good works," he said, adding that he believed the Oak Brook toymaker had already paid a price in "public humiliation" and "private torment."

Warner, who grew up poor and had an unhappy childhood, according to his attorneys, created Beanie Babies in the mid-1990s. The small, plush toys resembling bears and other animals triggered a craze that generated hundreds of millions of dollars for his Westmont-based TY Inc. Forbes recently put his net worth at $2.6 billion.

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