H. Ty Warner, the billionaire who created Beanie Babies, arrives at federal court for sentencing on Tuesday, Jan. 14, 2014, in Chicago. Last year Warner pleaded guilty to one count of tax evasion for hiding $25 million in income in secret Swiss bank accounts. (AP Photo/Andrew A. Nelles)
CHICAGO (AP) - The billionaire creator of Beanie Babies was sentenced
to two years of probation, but no prison time, on Tuesday for tax
evasion on $25 million in income he had stashed away in Swiss bank
H. Ty Warner, 69, appeared somber but composed as he made a brief
statement before receiving his sentence in a Chicago federal courtroom,
apologizing and saying he felt "shame and embarrassment" for what he had
He could have been sentenced to up to five years in prison, and
prosecutors were seeking prison time for Warner, who pleaded guilty last
year to a single tax evasion count.
U.S. District Judge Charles Kocoras, however, sentenced Warner to
probation and 500 hours of community service, praising the toy magnate
for the charity work he's done.
Kocoras said his decision was difficult, but he added, "Society will
be better served by allowing him to continue his good works."
The judge said Warner's "public humiliation" and "private torment" as
a result of his criminal prosecution was a punishment he's already
Warner was among the highest-profile prosecutions in the federal
government's push to go after Americans concealing income from the IRS
overseas, often in Switzerland. Prosecutors say at one point, Warner was
concealing as much as $107 million.
Beanie Babies first appeared in the mid-1990s, triggering a craze
that generated hundreds of millions of dollars for Westmont, Ill.-based
TY Inc., of which Warner is the sole owner. Forbes recently put his net
worth at $2.6 billion.
The small, plush toys have heart-shaped name tags and are made to
resemble bears and other animals. Some are designed to look like cartoon
or comic book characters. As collectibles, some fetch thousands of
Warner maintained a secret offshore account starting in 1996 with the
Switzerland-based financial services company UBS. He earned $3.1
million in gross income in 2002 through the account, but didn't report
it, prosecutors say.
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