Ty Warner, 69, also apologized as he stood before a federal judge in Chicago, removing his designer tortoise-shell glasses and wiping away tears as he struggled to regain his composure.
"I have so much to be thankful for," said the suburban Chicago businessman, his voice breaking as he cited his Illinois-based stuffed-toy company, TY Inc. "There is no excuse for my actions."
The toy-maker's 18-page plea deal says guidelines call for a prison term of around four years -- a calculation that makes it likely he'll serve time behind bars. It also requires he pay a $53 million civil penalty.
As Judge Charles Kocoras began questioning Warner about his intention to plead guilty, Warner cupped his hand over his ear, asking the judge if he could speak up. "My hearing isn't so good," Warner said.
When asked if he understood the potential penalties included prison, Warner replied quietly, "Yes, sir."
Beanie Babies first appeared in the `90s, triggering a craze for the plush toys fashioned into bears and other animals. An explosion of sales made Warner rich; Forbes recently put his net worth at $2.6 billion.
As an emotional Warner continued to apologize during Wednesday's hearing, his head bowed over a courtroom podium, before Kocoras finally stopped him, telling him he could elaborate at his Jan. 15 sentencing.
"There will be time for you to bare your soul (later)," the judge said.
Warner admitted he evaded paying $5 million in taxes due to the IRS over an 11-year period by setting up the secret accounts. At one point, he was concealing as much as $107 million, prosecutors said.
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