Batesville Herald Tribune, Batesville, Indiana

Community News Network

February 13, 2014

U.S. appeals tax sentence for beanie baby maker

CHICAGO — The Justice Department Thursday appealed the sentence of H. Ty Warner, the billionaire creator of Beanie Babies plush toys who got probation, not prison, for evading taxes on money hidden in a Swiss bank account.

Warner faced 46 months to 57 months in prison under nonbinding guidelines when he was sentenced Jan. 14 by U.S. District Judge Charles Kocoras in Chicago. Prosecutors, who urged Kocoras to impose some prison time on Warner, Thursday asked the U.S. Court of Appeals in Chicago to review his sentence.

Kocoras sentenced Warner, the founder of toymaker Ty Inc. and Ty Warner Hotels & Resorts, to two years of probation and 500 hours of community service. Warner pleaded guilty to evading almost $5.6 million in taxes on more than $24.4 million in undeclared income on accounts that held as much as $107 million.

Warner's evasion was the largest of more than 100 filed in a five-year crackdown against taxpayers and enablers who used offshore accounts to cheat the Internal Revenue Service. Prosecutors are concerned that his sentence will affect others around the country, said Bryan Skarlatos, a tax attorney at Kostelanetz & Fink in New York not involved in the case.

 "The case is important for the Justice Department because it's a very large account and a high-profile defendant, and prosecutors are obviously disappointed that they couldn't get a term of incarceration," said Skarlatos. They fear "that other defendants at sentencing will cite the Ty Warner case in arguing that they shouldn't go to prison," he said.

Warner's attorney Gregory Sandaglia didn't immediately return a call seeking comment on the appeal. Spokesman Eric Herman declined to comment.

Chicago U.S. Attorney Zachary Fardon filed the one-sentence notice of appeal with the appeals court.

Last year, Peter Troost, a grave-marker and monument maker, was sentenced to a year and a day in prison by a judge in the same Chicago courthouse. Troost admitted he evaded taxes on more than $3.3 million in income.

Lawyers for Warner, who has a net worth of $1.7 billion, argued that he deserved leniency because of his charitable contributions. They cited his donation of $140 million in cash and toys to charities.

Before sentencing Warner, the judge read letters from supporters describing some of the billionaire's charitable deeds for schools, a kidney dialysis patient, Ty Inc. salesmen and his local park district.

"Society will be best served by allowing him to continue his good works," Kocoras concluded.

Warner's lawyers said he sought entry in an IRS voluntary disclosure program that has attracted more than 43,000 taxpayers who avoided prosecution since 2009. Prosecutors said he didn't apply to the program until learning the government knew of his conduct.

Warner paid a civil penalty of $53 million and filed amended tax returns for the years 1999 to 2008, his lawyers said. He has also paid $14 million in back taxes and interest, according to prosecutors.

 From 1996 to 2008, Warner parked money at UBS in Switzerland and then at Zuercher Kantonalbank, failing to disclose those holdings to his own accountants, according to court papers. By 2008, the balance of his undisclosed account exceeded $107 million, prosecutors said.

 

1
Text Only
Community News Network
  • Police chief resigns over racial slur repost to Facebook

    A repost on his personal Facebook page of a racially-charged comment by the original poster of a comedy video has forced the police chief of an Oklahoma city to resign his office.

    August 21, 2014

  • Does Twitter need a censor?

    Twitter decided last year to make images more prominent on its site. Now, the social network is finding itself caught between being an open forum and patrolling for inappropriate content.

    August 21, 2014

  • sleepchart.jpg America’s sleep-deprived cities

    Americans might run on sleep, but those living in the country's largest cities don't appear to run on much.

    August 20, 2014 1 Photo

  • Who should pay for your kids ACT?

    Thirteen states paid for 11th-grade students in all public high schools to take the ACT college admission test this year, with several more planning to join them in 2015.

    August 20, 2014

  • Pets.jpg Why do people look like their pets?

    As much as we might quibble over the virtues and vices of Canis domesticus, however, and over whether human nature is any better or worse than dog nature, even dog fanciers don't usually want to look like a dog.

    August 20, 2014 1 Photo

  • Ice bucket challenge trending up

    Internet trends are a dime a dozen these days. Everything from Tebowing to planking to the cinnamon challenge can cause a wave of social media activity that can last for weeks before fizzling out.

    August 19, 2014

  • Africa goes medieval in its fight against Ebola

    As the Ebola epidemic claims new victims at an ever-increasing rate, African governments in Sierra Leone, Guinea and Liberia have instituted a "cordon sanitaire," deploying troops to forcibly isolate the inhabitants in an area containing most of the cases.

    August 18, 2014

  • Democrat? Republican? There's an app for that

    If you're a Republican, you might want to think twice before buying Lipton Iced Tea, and forget about Starbucks coffee. If you're a Democrat, put down that Reese's Peanut Butter Cup, and throw away the cylinder of Quaker Oats in your pantry.

    August 18, 2014

  • Five myths about presidential vacations

    In the nuclear age, presidents may have only minutes to make a decision that could affect the entire world. They don't so much leave the White House as they take a miniature version of it with them wherever they go.

    August 15, 2014

  • Can 6 seconds launch a career? A generation of Vine stars sure hopes so.

    A year ago, Shawn Mendes filmed himself singing a tentative acoustic cover of the Justin Bieber song "As Long as You Love Me" and put the results on Vine. He wasn't expecting much response. "I didn't really want anything to happen; I just kind of wanted to see what people would think," says Mendes, 16. "I posted that first Vine and woke up the next morning with 10,000 followers. That was pretty cool."

    August 14, 2014

Featured Ads
AP Video
NYC Doctor-in-chief Seeks Community Approach Indonesian Police Fire Tear Gas at Protesters Raw: Shots Fired in Liberian Shantytown DOJ, Bank of America Reach Record Settlement Raw: Cubavision Airs Images of Fidel Castro Raw: Grief After Deadly Airstrikes in Gaza Officer Who Pointed Gun at Protesters Suspended Kathy Griffin Challenges Minaj to 'a Booty Off' Johnson: Six Arrests, No Tear Gas in Ferguson Raw: Rescue, Relief Efforts at Japan Landslide Cadavers, a Teen, and a Medical School Dream Raw: Woman Escorted From Ferguson Protests California Drought Stings Honeybees, Beekeepers Officer Who Pointed Gun at Protesters Suspended Holder Hopes to Bring Calm to Ferguson US Mission to Rescue Hostages in Syria Failed Manfred, Torre and MLB Take Ice Bucket Challenge Bank of America Reaches Record $17B Settlement Holder Reassures Ferguson Community With Visit GlobalPost CEO Remembers Foley As a Brave Man
Seasonal Content
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
Facebook