The Creator of Beanie Babies Is in Trouble for a Secret Swiss Bank Account

Remember Beanie Babies? While it turns out that the toys were worthless for collectors, the guy who created them has done pretty well for himself. That is, until the U.S. began a crackdown on offshore tax evasion.

Remember Beanie Babies? While it turns out that the toys were worthless for some of their collectors, the guy who created them has done pretty well for himself. That is, until the U.S. began a crackdown on offshore tax evasion. H. Ty Warner, who remains the sole owner of TY Inc., had as much as $93.6 million in assets in a secret Swiss bank account. He failed to report about $3.2 million in income. And now, he's agreed to plead guilty to the charges and pay $53 million in civil fines.

Warner tried to get immunity from tax evasion charges back in 2009, when the federal government offered an amnesty program, aimed as Swiss bank account holders, that comes with a reduced penalty for those who volunteer. That program has brought in over  $5.5 billion in unpaid taxes since 2009 (and, it turns out, is having trouble effectively policing offshore accounts ever since sequestration). But Warner was apparently rejected from that program. He's had a Swiss account since 1996. The income in question stems from 2002, and it looks like Warner failed to report it several times. A statement from prosecutors explains:

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 form 1040 filed with the IRS in October 2003, as well as failing to report that same income on an amended 2002 form 1040 filed in November 2007."

Warner will pay a fine of  $53,552,248 in the plea. Here's the statement from his lawyer:

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. Mr. Warner accepts full responsibility for his actions with this plea agreement.

The fines won't be too big of a burden for the toy mogul, however: his net worth is about $2.6 billion, according to a recent Forbes estimate.