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Sentence in Beanie babies offshore disclosure case: probation

Last week we noted Attorney General Holder's statement that more criminal prosecutions may be coming against big banks for offshore tax evasion.

In today's post, we will discuss a current high-profile tax evasion case that has reached the sentencing stage.

The case is against Ty Warner, the billionaire creator of the popular "Beanie babies" toys.

Federal prosecutors accused Warner of hiding money in undisclosed Swiss accounts. He had tried to enter the IRS’s voluntary disclosure program in 2009. As we noted in our November 5 post last year, that program offers partial amnesty against criminal prosecution.

But Warner was turned down for the program because U.S. authorities were already investigating him.

After pleading guilty to a tax evasion charge and agreeing to pay a multi-million dollar fine, the 69-year-old Warner came up for sentencing.

The judge sentenced Warner to two years of probation, as well as community service, but not prison time. Under the federal guidelines, the presumptive sentence was a prison term of 46 to 57 months.

Explaining the decision, the judge pointed to the fact that Warner has given millions of dollars to charity. Warner had also argued that in applying for the voluntary disclosure program, he had tried to rectify his failure to disclose foreign accounts.

The government has said it will appeal the downward sentence departure. The appeal may very well not succeed. The government has not successfully appealed a downward departure in a criminal tax case since the U.S. Supreme Court held a few years ago that federal sentencing guidelines are not mandatory for judges.

Source: Prosecutor, "Beanie Babies Billionaire Tax Cheat Didn't Deserve 'Get-Out-Jail' Card," Janet Novack, May 9, 2014

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