Tuesday, May 13, 2014

Billionaire Beanie Baby Bum Should Go Straight to Jail

From the messy desk of Paul Levine...

For Ty Warner, apparently $1.7 billion isn't enough.

The creator of the Beanie Baby hid more than $100 million in secret Swiss bank accounts, failed to report at least another $24 million in income, and evaded more than $5.5 million in federal taxes. And for this, Chicago Federal District Judge Charles Kocoras sentenced Warner, 69, to two years PROBATION plus 500 hours of community service!

The judge said that Warner's charitable contributions "trumped" his crimes.

Oh, brother!

Here's a shot of a grim Warner the day he pleaded guilty, but I'll bet he's smiling today.
In its brief appealing the sentence, the government points out that:
1. Warner vastly overstated his charitable giving by calculating the $140 million RETAIL price of Beanie Babies he gave away, which actually cost him less than $36 million to produce. The toys were given away over a 14 year period and amounted to less than 2% of Warner's net worth.  Of course, he also took a charitable deduction for them.
2. Warner has never revealed where $90 million of the stashed loot came from.
3. "A defendant's acts of charity cannot 'trump' his criminal conduct."
Federal sentencing guidelines called for about four years in prison, yet  the government only sought one year.  Still, the judge rejected even that. (For the record, Judge Kokoras, 76, has served 34 years on the federal bench, since being appointed by President Carter.  I'm beginning to re-think lifetime appointments).

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

(What? You can't give money from prison?)

"The public humiliation the defendant has suffered is manifest," the judge continued. "Only he knows the private torment he has suffered."  

(Oh, Boo Hoo!)

 Friends, if you or I cheated the government out of $5.5 million, we'd be doing heavy time. But a billionaire? Well, his humiliation is enough.
Judges have great discretion in sentencing defendants and may "downward depart" from the Federal Sentencing Guidelines, if based on good reasons. In this case, Judge Kocoras pointed out that the "omitted income" (nice innocent sounding phrase) was but a small fraction of Warner's total income.  And, of course, Warner has now paid his back taxes, penalties and a $53 million fine.

(This is called buying your way out of trouble).

Citing Warner's contributions to charity, the judge called him a "very unique individual" because of his "services and kindness to mankind."

(I'm on the verge of tossing my cookies here).

The issue on appeal is whether the judge's "downward departure" was "reasonable."

Hell, no, it wasn't. Do you disagree?

You can read the government's appeal brief here. Warner's lawyers have yet to file their papers, and their client, who owns resorts in Santa Barbara, Mexico, and Hawaii, among other places, plus several luxury hotels, continues to enjoy his freedom.

Paul Levine


  1. A universal truth: If you're rich, you can get away with anything.

  2. from Jacqueline: Now I'm ticked off. Years ago my friend's daughter was collecting these things, and as they came out first in the USA, I would receive emails with "orders" from the UK. I remember grabbing hold of a Wise Owl beanie baby in a toy store, and having another woman almost strangle me for it (it was the last one in any shop for miles around, apparently). I have never come closer to fisticuffs in my life!! Where are that dear child's beanies now? Incarcerated in a cardboard box in her parent's loft. Incarcerated - good word for billionaire tax evasion.

  3. James O. Born5/14/2014 4:59 AM

    Never trust the Swiss. Or Billionaires.