Ty Warner should spend time behind bars, federal prosecutors say, for evading taxes on millions of dollars he held in a secret offshore bank account, according to the Chicago Tribune.
The Oak Brook resident and founder of Ty Inc., the company behind Beanie Babies, pleaded guilty to tax evasion in October after he was charged in September and is expected to be sentenced later this month, the Trib reports.
Warner failed to report $3,161,788 in gross income made through investments held in a UBS account he did not report to the IRS.
Prosecutors recommended that U.S. District Judge Charles Kocoras consider a 46- to 57-month prison sentence, according to the Trib. The maximum sentence for Warner's offense is five years.
The prosecutors' push for jail time came in a court filing ahead of sentencing.
Warner, 69, said in his own court filing that he should receive probation and no jail time, the Trib reports. He has already agreed to pay a $53.5 million civil penalty.
A release from the U.S. Attorney's Office in September explained the charge against Warner:
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 $93,630,083.
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. The charge states Warner initially failed to pay $1,257,064 in income tax on the unreported income, but his amended 2002 return reduced the amount of additional tax that he failed to pay to $885,300. By omitting his UBS income, Warner falsely reported his total income in 2002 was $49,124,095, according to the charge.