Probation upheld for tax-evading Beanie Babies' creator

CHICAGO - An appeals court has upheld a sentence of probation for the billionaire creator of Beanie Babies despite arguments by federal prosecutors that he deserves prison time.

H. Ty Warner evaded $5.6 million in U.S. taxes by hiding millions of dollars in a Swiss bank account. He pleaded guilty, made full restitution and paid a nearly $54 million civil penalty.

Prosecutors rarely appeal sentences, but they argued that Warner got off too easy. They said the sentence of two years' probation could erode the judicial system's ability to deter other tax evaders.

But the trial judge cited Warner's "overwhelming" charitable works in handing down the lighter sentence.

In Friday's ruling, the appellate court found that the trial judge did not abuse his considerable discretion.