Barbie's founder jokes in the 'Barbie' movie about getting in trouble with the IRS. Here's what actually happened.

• The fictional Ruth Handler jokes in Greta Gerwig's "Barbie" about getting in trouble with the IRS.
• The real-life Handler was indicted for conspiracy and making false financial statements to the SEC.

Barbie's founder jokes in Greta Gerwig's "Barbie" movie about getting in trouble with the IRS, but the experience left the real-life Ruth Handler wanting to "die of shame."

"I am Mattel," Handler, played by Rhea Perlman says in the movie. "At least, until the IRS got to me."

Handler, who had cofounded Mattel and was the driving force behind the launch of Barbie in 1959, was embroiled in a financial scandal in the 1970s.

After taking time out to get a mastectomy, Handler "was never able to grab hold of things and Mattel and regain control," she wrote in her autobiography "Dream Doll." In 1974, Mattel admitted that it had overstated some revenues and income, per The New York Times.

Handler and her husband Elliot were ousted as co-chairs of Mattel's board and later resigned as directors in October 1975.

In November of that year, Mattel, the Handlers, and the company's outside auditors settled five shareholder suits that accused the toymaker of issuing misleading financial statements and suggested that it had overstated its $34 million pretax income in 1971 by between $15 and $20 million, per The New York Times.

Under the settlement, around $30 million was paid to shareholders and the Handlers surrendered two million Mattel shares.

But that wasn't the end of Ruth Handler's financial woes. In February 1978, Handler, three other former Mattel officers, and a supervisor were indicted by a federal grand jury for conspiracy, mail fraud, and making false financial statements to the Securities and Exchange Commission.

The 10-count indictment charged Handler and former executive VP Seymour Rosenberg with falsifying internal business records about earnings and sales between 1971 and 1973 so that they could influence Mattel's stock price.

The indictment alleged that they did this so that they could acquire other companies and borrow funds from the Bank of America. Handler and Rosenberg also filed false information in a Bank of America loan application, the indictment said.

The indictment said that Mattel also created fake documents that showed it making more than $10 million more in sales than it actually did and that Handler and Rosenberg concealed false financial statements from its external auditors.

The indictment also named a former Mattel VP, a former controller, and a supervisor on the company's toy division's accounting team on one count each for making false reports to the SEC.

"The marketing guys who had done most of the 'dirty work' were not indicted," Handler later wrote.

She said that a mix-up meant she was almost placed in a jail cell on the day of her indictment.

Handler said that after being indicted, "I wanted to die of shame. I had always prided myself on being fair and honest, and always valued my business reputation."

After the news articles came out, she was sent "spiraling ever downward in shame and humiliation," she wrote. She started taking the freight elevator in her apartment building to avoid the stares of the other residents and stopped visiting her country club. "I was desperate to hide from the public," she wrote.

Handler initially pleaded innocent before changing it to no contest, telling the court that she had lost her "zeal to fight."

In her autobiography, she wrote that one reason for her plea change was to stop the endless legal meetings she had to attend, which, combined with her work on her prosthetic-breast company Nearly Me, left her with more physical and emotional pressures "than I felt I could bear."

Both Handler and Rosenberg were ordered that December to pay $57,000 in "reparations" and sentenced to 2,500 hours of community service over their five-year probation period.

"The crimes each of you committed in the opinion of this court are explosive, parasitic and I think disgraceful to anything decent in this society," US District Judge Robert Takasugi said, per The Los Angeles Times.

Handler wrote that she was "convinced" that the US Attorney's Office went after her "so aggressively" because of her gender.

"Bring down a woman, a famous woman, an uppity woman who had the nerve to climb to the top – just think of all the reputations that could be made by bringing her down," she wrote.

The three other defendants in the case, who plead no contest, were fined $5,000 each and sentenced to 160 hours of community service.