July 12, 2015
Seventh Circuit panel affirms as reasonable probation sentence for tax dodging Beanie Babies billionaire
Late Friday, a Seventh Circuit panel rejected the government's claim that a probation sentence given to a high-profile tax cheat was unreasonable. The lengthy opinion in US v. Warner, No. 14 -1330 (7th Cir. July 10, 2015) (available here), gets started this way:
Defendant H. Ty Warner, the billionaire creator of Beanie Babies, evaded $5.6 million in U.S. taxes by hiding assets in a Swiss bank account. He pled guilty to one count of tax evasion, made full restitution, and paid a $53.6 million civil penalty. The Sentencing Guidelines provided a recommended 46- to 57-month term of imprisonment, but the district judge gave Warner a more lenient sentence: two years’ probation with community service, plus a $100,000 fine and costs. The government claims his sentence is unreasonable because it does not include a term of incarceration.
In a typical case, we might agree. But this is not a typical case. The district judge found Warner’s record of charity and benevolence “overwhelming.” Indeed, the judge remarked that Warner’s conduct was unprecedented when viewed through the judge’s more-than-three decades on the bench. In the district court’s opinion, this and other mitigating factors — including the uncharacteristic nature of Warner’s crime, his attempt to disclose his account, his payment of a penalty ten times the size of the tax loss, and the government’s own request for a sentence well below the guidelines range — justified leniency. District courts enjoy broad discretion to fashion an appropriate, individualized sentence in light of the factors in 18 U.S.C. § 3553(a). The court here did not abuse its discretion. Rather, it fully explained and supported its decision and reached an outcome that is reasonable under the unique circumstances of this case. We therefore affirm Warner’s sentence.
Though the panel stresses unique factors applying only in this case to support its reasonableness ruling, white-collar practitioners (especially those in the Seventh Circuit) will find a lot of broader interest and potential value in this opinion.
Prior related posts:
- You be the federal judge: what sentence should the Beanie Babies billionaire get for tax evasion?
- Feds to appeal probation sentence given to tax-dodging Beanie Babies billionaire
- Feds call probation sentence given to Beanie Babies billionaire substantively unreasonable
- Seventh Circuit panel seemingly unmoved by feds appeal of probation sentence given to Beanie Babies billionaire
July 12, 2015 at 11:19 PM | Permalink
When you give up retribution as a goal, everyone wins.
So, does this defendant need to be incapacitated? Only if the charge is pretextual for more serious, dangerous acts. Example is the tax evasion charge against Al Capone, really standing in for the intolerable, last straw St. Valentine's Day Massacre.
One has to question the judgment of the appellant prosecutor. As a federal tax payer, I suggest he resign or be let go.
They spent $2 million prosecuting Martha Stewart for lying to the FBI, not for the original $100 fine of insider trading. She went to prison. Her shares dropped. She bought them back. Upon release, they rebounded. She made a $billion, more than ever before. That idiot, media chasing, self promoting prosecutor was never fired.
Posted by: Supremacy Claus | Jul 13, 2015 7:55:38 AM