CHICAGO (AP) – Federal prosecutors seeking to put the billionaire creator of Beanie Babies in prison for hiding millions in Swiss bank accounts told appellate court judges Wednesday that the toymaker’s sentence of probation threatens to erode the judicial system’s ability to deter other tax evaders.
The hearing before the U.S. 7th Circuit Court of Appeals in Chicago delved into whether H. Ty Warner got off too easy given the lengths he went to conceal his crime, or whether the judge was right to essentially deem the misdeeds to be out of character for someone with a substantial record of charitable giving. While prosecutors rarely appeal sentences, they contend that the trial judge in this case inadvertently sent the message that there are different standards of justice for the rich and the poor.
Assistant U.S. Attorney Michelle Petersen rattled off the steps Warner took to conceal his wealth for more than a decade: lying to his own accountant, instructing the bank to destroy records and shifting money to another foreign bank when his came under scrutiny. He also warned the bank of “consequences” if his requests were not heeded, and only made efforts to come clean after learning his banker had been indicted, she said.
One of the appeals judges interrupted her, saying the trial judge, Charles Kocoras, considered all of that but acted within the bounds of the court’s discretion by focusing heavily on Warner’s character, in particular Warner’s charitable work and private acts of generosity, which Kocoras described as “overwhelming.”
The judge is “not some bleeding-heart Pollyanna,” said Judge Ilana Diamond Rovner, adding that Kocoras must have agonized over the decision and likely knew it would be unpopular.