Ty Warner lawyers call tax dodging sentence ‘reasonable’

Lawyers for convicted tax evader Ty Warner said his sentence of two years’ probation was reasonable, pointing out that the punishment of the Beanie Babies billionaire was consistent with more than half of the offshore banking cases that the government has prosecuted, according to a court filing Thursday.

Last October, the creator of the stuffed collectibles pleaded guilty to one count of tax evasion in connection with failing to report an offshore bank account at UBS. As part of a plea agreement, he agreed to pay all back taxes and interest, as well as a $53 million civil penalty. U.S. District Judge Charles Kocoras sentenced Warner to two years’ probation, partly swayed by about 70 letters detailing Warner’s acts of kindness.

The government appealed that sentence in May, saying the judge gave too much weight to Warner’s charitable acts, considering his wealth and that many of the letter writers were  current or former workers of Westmont-based Ty Inc. It was pushing for a prison sentence of at least a year.

In a 70-page filing on Thursday in a U.S. appeals court, Warner’s lawyers say that the sentence is reasonable and that Kocoras didn’t abuse his discretion.

“The sentence is hardly an outlier, as probation sentences are commonplace in offshore account cases,” the filing said. “In short, the district court acted  well within the bounds of its considerable discretion.”

Nearly two-thirds of offshore tax offenders that the government has prosecuted  have received probation – “not to mention the fact that tens of thousands have avoided prosecution altogether through the voluntary disclosure program from which” Warner was rejected, his lawyers said.

Warner’s filing also said that, nationwide over the past three years, appeals courts have reversed fewer than 1 percent of challenged sentences as unreasonable.

The government has said that Warner hid $100 million in a Swiss bank account, refused to report $24 million of income to the Internal Revenue Service and evaded $5.5 million in taxes.