Beanie Babies toys creator Ty Warner could face up to five years in prison after agreeing to admit a charge of tax evasion.
Federal prosecutors said that Ty Warner, 69, “went to great lengths” to hide more than $3 million of income in a secret Swiss bank account.
Ty Warner’s lawyer said his client had agreed to pay a $53m fine.
The Illinois tycoon’s net worth is estimated by Forbes at $2.6 billion, ranking him the 209th richest American.
Ty Warner’s attorney, Gregory Scandaglia, said his client accepted “full responsibility for his actions with this plea agreement”.
“This is an unfortunate situation that Mr Warner has been trying to resolve for several years now,” Gregory Scandaglia told the Associated Press.
The charges come as a result of a clampdown by US authorities on its citizens hiding money abroad to avoid paying tax – particularly in Switzerland.
It is alleged that Ty Warner, who also has a reputation for philanthropy, set up a Swiss bank account in 1996 with the UBS financial services company.
He failed to tell his accountants or the US tax authorities about the existence of the account, according to a press release by the US Attorney’s office in Chicago.
The prosecutor’s statement did not mention a $53 million fine.
Beanie Babies are a soft toy, popular in the 1990s, that sell for between $5 and $7.
Allen Adamson, from the branding firm Landor Associates, said the toy company could be affected by the “negative buzz” of the case.
“It’s so jarring because this product feels so sweet, so innocent,” he said.
However, branding expert Laura Ries, of Ries & Ries, disagreed.
“People may not buy [a Beanie Babies toy] because it’s not as cool as it was. But I don’t think consumers care the owner didn’t pay his taxes and is in big legal trouble.”