It Pays to be Rich – Billionaire Tax Evader Gets Probation
A three-judge panel of the 7th U.S. Circuit Court of Appeals rejected the call for prison sentence for Ty Warner, the Beanie Baby creator. Warner evaded $5.6 million in taxes but gets to walk away because of his record of charity and benevolence, noticed by U.S. District Judge Charles P. Kocoras.
The Chicago Daily Law Bulletin states that “in a concurring opinion, Judge Joel M. Flaum wrote he believes prison time is appropriate for Warner.” Judge Flaum wrote, “He purposely sought to deprive the federal government of millions of dollars of tax revenue simply to amass more of his enormous wealth.” Others have praised the judge panel of the 7th Circuit for recognizing Warner’s charitable acts that occurred before his wrongful doings.
Warner based his company, Ty Inc. in Oak Brook, IL and gained popularity in the 1990’s with Beanie Babies. He then collected $24.4 million in interest on an offshore bank account in Switzerland from 1996 to 2007. Since Warner failed to report that income in his tax returns, a criminal case against him was made.
In 2013, Warner was then charged with one count of tax evasion for the amount of $885,300 in 2002. Warner pleaded guilty and under a plea agreement, he admitted to evading $5.6 million in taxes from 1996 to 2007. He agreed to pay full restitution and a civil penalty equating to more than 53.5 million.
Warner’s sentence range was calculated to be 46 to 57 months but he asked for probation. Kocoras sentenced Warner to two years’ probation with the condition that he perform at least 500 hours of community service as well as pay a $100,000 fine.