On Tuesday, Beanie Babies Founder Ty Warner received a sentence of two years probation for concealing taxable income in a Swiss bank account. The sentence spares the 69-year-old billionaire from what could have been a five-year prison sentence. Here's what you need to know about this money-hoarding baby maker:
1. He Had to Drop Out of College Because He Couldn't Afford It
The Defense filed a memorandum that encouraged a lenient sentencing based, in part, on the trying circumstances of Warner's childhood. The section on Warner's personal life begins:
Ty emerged from an unhappy family and a youth devoid of educational advantages to become, through decades of hard work and extraordinary creativity, a self-made American
The memorandum goes on to tell of how a 15-year-old Warner left home for St. John Military Academy in Delafield, Wisconsin. Warner worked several menial jobs to pay for college, enrolling at Kalamazoo in 1962, but dropping out after a single year when he was no longer able to afford tuition. His family unsupportive both financially and otherwise, Warner had no home to retreat to. Hearing deficiencies prevented him from joining the armed forces. His mother suffered from mental illness throughout his childhood and in the late 1970s Warner took his mother to Elgin Mental Hospital, where she was diagnosed with paranoid schizophrenia. According to the memorandum Ty's father played "little to no role in the care of Ty's mother."
2. He Worked as a Door to Door Toy Salesman
After dropping out of school, Warner worked at various times as a busboy, bellman, valet car parker, and fruit market vendor. Then, while working as a sales representative with Dakin Toy Company of California, Warner stumbled onto a calling, the memorandum reads:
Ty especially enjoyed selling a product intended for children, and he developed a keen sense of what
particular plush toys children enjoyed. Ty became an expert in the products he was selling, focusing on the color, expression, size, and quality of every toy. After only a few years, he
became Dakin’s number one salesman.
In 1985, Warner founded his own toy company Ty Inc. Starting with a small collection of plush toy cats, the company of course struck gold in the early 1990s with the plastic pellet-filled, collectible Beanie Baby plush toys. By the mid-90's Ty Inc. was a multi-billion dollar company.
3. He Hid $24 Million in Swiss Bank Accounts
In January of 1996, Swiss financial advisors helped Warner create a UBS account. Warner opened multiple other accounts in subsequent years. The memorandum claims that Warner later regretted the decision to shelter this income, but felt trapped by his prior tax returns and non-compliance. In 2002, Warner attempted to conceal his name from being listed on a Zurcher Kantonalbank account by registering in the name of the "Molani Foundation," an apparent sham company.
Warner pleaded guilty to one count of tax evasion this past October.
4. Warner Gave a Woman $20,000 for Giving Good Directions
The defense memorandum emphasizes Warner's considerable philanthropy. His notable donations include a $21 million gift to the Princess Diana Memorial Fund, $6 million to the Andre Agassi Foundation for underprivileged children of Las Vegas, and millions of dollars of toys donated to the Children's Hunger Fund.
A Huffington Post article from 2012 recalls a time Warner found himself lost in Santa Barbara and pulled into a parking lot to ask for directions. Local resident Jennifer Vasilakos was in the lot at the time, soliciting donations for stem cell treatment she needed to help with her kidney problems. Warner gave her $50 for her directions, promising more help in the future. Vasilakos later received a $20,000 check in the mail.
5. He Will Pay a $53 Million Civil Penalty
Warner will also pay $16 million on back taxes. Despite his evasions, Warner has paid $100 billion in taxes over the course of his incredibly profitable lifetime.