Warner, 69, of Oak Brook, Ill., is charged in a felony indictment, which was filed Wednesday morning. TY Inc., which makes Beanie Babies and other plush animals, is based in Westmont.
Warner is cooperating in the investigation and plans to plead guilty to the charge, according to the U.S. Attorney's Office.
Warner's attorney said he will plead guilty to a single charge of tax evasion and pay a civil penalty of $53,552,248 for failure to file a Foreign Bank Account Report.
"This is an unfortunate situation that Mr. Warner has been trying to resolve for several years now - including through an attempt to enroll in the IRS's Offshore Voluntary Disclosure Program in 2009," said attorney Gregory Scandaglia.
"Regardless of wealth, everyone must pay taxes on all of their income, not just the amount they choose to report. The charge alleges that Warner went to great lengths to hide from his accountants and the IRS more than $3.1 million in foreign income generated in a secret Swiss account. Such conduct invites federal prosecution," said Gary S. Shapiro, United States Attorney for the Northern District of Illinois.
Warner is the second taxpayer charged in federal court in connection with an ongoing investigation of U.S. taxpayer clients of Union Bank of Switzerland (UBS) and other overseas banks that hid foreign accounts from the Internal Revenue Service.
UBS admitted to helping taxpayers hide accounts from the IRS in 2009, and as part of an agreement provided the government with the identities of customers.
Warner has allegedly maintained the secret account since 1996, and in 2002 transferred assets of $93,630,083 to another account, federal authorities said.
In 2002, Warner earned $3 million in gross income from that Swiss account, federal investigators say. The IRS said he failed to report income from that account, and instead falsely reported his income at $49,124,095.
Tax evasion carries a maximum penalty of five years in prison and a $250,000 fine. In addition, a defendant convicted of tax offenses faces mandatory costs of prosecution and remains civilly liable to the government for any and all back taxes, as well as a potential civil fraud penalty of up to 75 percent of the underpayment plus interest. Federal tax law requires U.S. taxpayers pay taxes on all income earned worldwide.
Story courtesy of ABC7 News sister station WLS in Chicago.