Appeals court affirms no prison time for Beanie Baby billionaire tax cheat

SHARE Appeals court affirms no prison time for Beanie Baby billionaire tax cheat
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H. Ty Warner after his sentencing in 2014 | AP photo

A federal appellate court on Friday affirmed a lower court decision that Beanie Baby billionaire Ty Warner gets to avoid prison despite evading $5.6 million in U.S. taxes by hiding assets in a Swiss bank account.

The federal guidelines recommended a prison sentence of 46 to 57 months, but the district court, citing Warner’s work for charity, gave him a more lenient sentence last year of two years’ probation with 500 hours community service, $100,000 in fines and costs. Warner also agreed to pay a record $53 million fine and $27 million in back taxes and interest as part of his plea agreement with the government.

The sentence was a slap in the face to prosecutors who had asked for Warner to be imprisoned for at least a year. They balked at the judge’s decision and appealed, but the appellate court found that U.S. District Court Judge Charles Kocoras did not abuse his wide discretion in imposing a sentence.

“Rather, it fully explained and supported its decision and reached an outcome that is reasonable under the unique circumstances of the case,” according to the appellate ruling.

At the sentencing hearing, Kocoras was presented with numerous examples of Warner’s generosity over the years, including writing a $20,000 check to a stranger undergoing dialysis that Warner had by chance asked for directions in a Santa Barbara parking lot.

In another instance, in honor of Princess Diana, Warner designed a plush toy and donated the $20 million in profits to her memorial fund.

Kocoras said that Warner’s charitable acts were “motivated by the purest of intentions” and demonstrated a “depth of humanity” that he had never before seen in a criminal defendant.

“Society will be best served by allowing him to continue to do his good works,” the judge said.

Warner’s attorney, Gregory R. Scandaglia, said in a statement Friday: “We’re gratified by the Seventh Circuit’s ruling. Judge Kocoras imposed a just and well-reasoned sentence, and the judges of the Seventh Circuit unanimously agreed. From the beginning, Mr. Warner accepted responsibility for his actions. Since this case began, he has paid over $80 million in penalties, fines and taxes to the federal government. He has also eagerly fulfilled his community service program and looks forward to continuing his work with students in the City of Chicago.”

The U.S. Attorney’s office declined to comment on the ruling.

Contributing: Kim Janssen

Warner 7th Cir July 10 2015 (Sentence Affirmed)


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