Ty Warner, owner of Westmont-based Ty Inc., to plead guilty, pay $53.5 million penalty for tax evasion
WESTMONT – Ty Warner, the creator of Beanie Babies and sole-owner of Westmont-based Ty Inc., will plead guilty to tax evasion and pay a $53.5 million civil penalty for allegedly failing to report income he earned in a secret offshore financial account with Swiss Bank UBS, his attorney said Wednesday.
Warner, 69, of Oak Brook, was charged Wednesday morning in U.S. District Court.
“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,” Warner’s attorney Gregory Scandaglia said in a statement. “Mr. Warner accepts full responsibility for his actions with this plea agreement.”
Warner is the second taxpayer charged in Federal Court in Chicago in connection with an ongoing investigation of U.S. taxpayer clients of Union Bank of Switzerland (UBS) and other overseas banks that hid foreign accounts from the Internal Revenue Service.
In February 2009, UBS entered into a deferred prosecution agreement with the United States, admitting that it helped taxpayers hide accounts from the IRS. As part of the agreement, UBS provided the government with the identities of, and account information for, certain customers of UBS’ U.S. cross-border banking business.
"The charge alleges that Warner went to great lengths to hide from his accountants and the IRS more than $3.1 million in foreign income generated in a secret Swiss account. Such conduct invites federal prosecution," Gary S. Shapiro, United States Attorney for the Northern District of Illinois, said in a statement.
Westmont's largest park is named after Ty Warner.
In 1998, Ty Warner donated $7 million toward the development of Ty Warner Park, a 40-plus acre park at the corner of Blackhawk and Plaza drives in Westmont.
Ty Inc.'s headquarters are located across the street from the Westmont park.
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 $93.6 million.
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 tax forms, as well as failing to report that same income on an amended 2002 tax form filed in November 2007.