Beanie Babies were one of the 1990s biggest fads: colorful, pellet-filled plush toys given cutesy names and an aura of collectibility. By mid-decade, investment mania reached such dizzying heights that an active collectors’ “gray market” developed. Like tulip mania before it, and cryptocurrency after, Beanies became a popular alternative asset, with some examples of the $5 toy—in mint condition, with its original hanging tag—selling for thousands of dollars apiece.

Divorced couples fought over their Beanie Baby assets, and children were trampled by stampeding collectors. Some families sank their entire life savings into acquiring the rarest examples, hoping to fund retirements and put kids through college. And when the Beanie bubble ultimately burst, their stacks of floppy, understuffed toys were rendered virtually worthless.

Amid such hysteria, an underground economy began to flourish—and with it, a wave of criminality. Theft, fraud and counterfeiting spun up over fuzzy-faced soft toys with names such as “Bananas” (a monkey), “Hairy” (a spider) and “Humphrey” (a camel).

Some opportunists who crossed the legal line to profit from the craze spent years in jail as a result. In the end, the excessive greed seemed to infect the parent company Ty Inc., which was accused not of criminality, but of trying to manipulate the market. The company's efforts eventually contributed to the implosion of the 1990s’ fad.

On the basic, petty-crime level, people filched Beanie Babies from owners, snatching them from homes and car dashboards alike. Ohio police reported coming across Beanie Babies during busts of organized-crime groups, with one officer recalling the jarring sight of a floppy purple teddy bear discarded on the floor.

“I thought, good heavens, this bear is worth $400,” officer Gary Cameron told The New York Times in 1998. “What’s it doing here?”

More ambitious thieves looked for targets further up the food chain. In 1998, police investigating a stolen-goods fencing operation in Columbus, Ohio discovered $20,000 worth of the beanbag animals; most had been lifted from the van of a toy distributor in town for a Beanie convention.

In March 1999, a burglar dubbed the “Beanie Baby bandit” stole 200 of the stuffed animals from a stationery shop in Centerport, New York. While their face value might have been only $5 apiece, or $1,000 for the entire haul, the toys sold readily online for many multiples of their original cost.

These were the early, wild-west days of the online auction site eBay, when flipping discontinued Beanie Babies offered an easy road to quick cash. One Nashua, New Hampshire couple used forged checks to buy $2,400 worth of the valuable toys, then resold them at a profit to buy heroin.

In more complicated cases, scam artists used the internet to bilk collectors. In Pensacola, Florida, a woman named Melissa Ann Stiver auctioned off rare editions online for more than $1,000 a pop, then failed to deliver the goods. Stiver was arrested in February 1998 on multiple counts of grand theft, after a Tennessee collector complained that she had never received “Nana the Monkey” or “Chilly the Polar Bear.” (She paid $2,500 for the two together, money Stiver spent on home-improvement projects.)

On other occasions, people did receive the toys, but were horrified to learn that they’d paid through the nose for counterfeits. Telltale signs included poorly printed labels, dull eyes or slightly off-center plastic snouts. One rare “Royal Blue Peanut” toy arrived encrusted in cheap blue pigment—a more common model with an unconvincing dye job.

Overseas fakesters flooded the American market with thousands of phony toys. In the low-quality digital photos of the mid-1990s, bogus Beanies appeared nearly indistinguishable from the real deal.

All this greed wasn’t limited to consumers, however. As Beanie Baby mania became more and more protracted, Ty Inc. upset retailers and customers alike by flexing its corporate muscle. Ty went aggressively after knockoff producers and summarily cut off supplies to retailers that undercut prices by running promotions such as buy five bears and get one free.

In 1997, a Connecticut toy store, called Tybran after its owners’ young sons, Tyler and Brandon, received a cease-and-desist letter ordering them to change the name. “The boys are distraught that a toy company would pick on them,” the owner told The Los Angeles Times.

The toy giant did whatever it could to stem the tide of rule-breaking, including urging children to report counterfeits online and registering its trademark with U.S. customs officials. People trying to make a quick buck by bringing home bags full of special overseas editions were labeled “importers,” and had their goods swiftly confiscated.

In September 1999, Ty Inc. blindsided collectors with a surprise announcement. Tacked onto the end of a press release about new toys, the company wrote: “VERY IMPORTANT NOTICE: On December 31, 1999-11:59 p.m. (CST) All Beanies will be retired…including the above!” Enthusiasts worried about the impact this would have on the value of their collections; rumors abounded that its founder, Ty Warner, had bought an island or been bought out by Disney.

A few months later, allegedly as a response to fans, the company claimed to have changed its mind. Instead of axing Beanie Babies altogether, it would release an entirely new line in the new millennium, starting with a shimmering, star-spangled bear called “The Beginning.”

Some have speculated that this shock decision was an attempt to make future Beanie Babies more difficult to counterfeit. Others called it a ham-handed attempt to fabricate an aura of rarity and rekindle interest in Beanies in the face of softening sales.

Whatever the reasoning, the damage was done. Many felt used by a publicity stunt designed to goose enthusiasm for the brand—and sales slumped. Within a couple of years, the plush animals once worth thousands were worthless, and treasured collections were relegated to hospital-donation boxes.