Beanie Babies Creator Cries, Pleads Guilty to Tax Evasion

Beanie Babies Creator Pleads Guilty to Tax Evasion
By MICHAEL TARM

CHICAGO -- The billionaire who created Beanie Babies broke down crying in court Wednesday as he pleaded guilty to one count of tax evasion for hiding $25 million in income in secret Swiss bank accounts.

H. Ty Warner, 69, also apologized as he stood before a federal judge in Chicago, removing his designer tortoise-shell glasses and wiping away tears as he struggled to regain his composure.

"I have so much to be thankful for," said the suburban Chicago businessman, his voice breaking as he cited his Illinois-based stuffed-toy company, TY Inc. "There is no excuse for my actions."

The toymaker's 18-page plea deal says guidelines call for a prison term of around four years -- a calculation that makes it likely he'll serve time behind bars. It also requires he pay a $53 million civil penalty.

As Judge Charles Kocoras began questioning Warner about his intention to plead guilty, Warner cupped his hand over his ear, asking the judge if he could speak up. "My hearing isn't so good," Warner said.

When asked if he understood the potential penalties included prison, Warner replied quietly, "Yes, sir."

Beanie Babies first appeared in the 1990s, triggering a craze for the plush toys fashioned into bears and other animals. An explosion of sales made Warner rich; Forbes recently put his net worth at $2.6 billion.

As an emotional Warner continued to apologize during Wednesday's hearing, his head bowed over a courtroom podium, before Kocoras finally stopped him, telling him he could elaborate at his Jan. 15 sentencing.

"There will be time for you to bare your soul [later]," the judge said.

Warner admitted he evaded paying $5 million in taxes due to the IRS over an 11-year period by setting up the secret accounts. At one point, he was concealing as much as $107 million, prosecutors said.


Increase your money and finance knowledge from home

Timing Your Spending

How to pay less by changing when you purchase.

View Course »

How to Buy a Car

How to get the best deal and buy a car with confidence.

View Course »

Add a Comment

*0 / 3000 Character Maximum

8 Comments

Filter by:
Richard

Apparently he was his own advisor, what a dumbass, there is always a paper trail if those in charge will pursue it, obviously some one did, and, now, don't drop the soap!!!!!

October 03 2013 at 1:00 PM Report abuse rate up rate down Reply
NAOMI

I\'m just crying in my coffee over this! I sold tons of his BBs and paid taxes on all my earnings. The SOB had a grand extortion scheme - in order to get this BB, you had to buy X amount of other crap. Let him rot in hell with all his little animals surrounding him. I despise people like this. Take, take, take. Guess Ty got himself caught!

October 03 2013 at 10:25 AM Report abuse rate up rate down Reply
joethightwad

With more money than he could spend in a hundred lifetimes, this fool chisels the country that gave him such incredible wealth on a few million in taxes. Obscene wealth appears to lure some into a fantasy worth where money is nothing more than a way of keeping score among those who possess it.

October 03 2013 at 8:53 AM Report abuse rate up rate down Reply
poll100

A fool and his money are soon parted, hopefully he'll spend those years in prison.

October 03 2013 at 7:44 AM Report abuse rate up rate down Reply
betty_brock

Will there be a tax cheat beanie baby?

October 02 2013 at 7:59 PM Report abuse +2 rate up rate down Reply
brhurdle

The man is really bad at assessing risk versus reward. Given his vast wealth, the risk was massive given the relative amount to be gained. The bottom line is that he became arrogant in believing that he was untouchable given his privilege in most areas of life. There is certainly no sympathy from my perspective.

October 02 2013 at 7:12 PM Report abuse +2 rate up rate down Reply
kvool

How much money is enough??? American Greed again. Why couldn't he just pay the taxes? Yes, he should serve prison time, but that still isn't enough.

October 02 2013 at 5:30 PM Report abuse +3 rate up rate down Reply
sam54ct

Smart enough to con millions of Americans into believing his products were collectibles, yet not smart enough to avoid being caught for tax evasion.

October 02 2013 at 1:24 PM Report abuse +2 rate up rate down Reply