yoga leadership to those arrested for tax evasion | USAO-SDNY

Damian Williams, United States Attorney for the Southern District of New York, Thomas Fattorusso, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation, New York Field Office (“IRS-CI”), and Jonathan Mellone, Special Agent – in charge of the New York Regional Office of the United States Department of Labor – Office of Inspector General (“DOL-OIG”), announced charges against GREGORY GUMUCIO, MICHAEL ANDERSON and HAVEN SOLIMAN for participating in a conspiracy to commit tax evasion for at least seven years. The three defendants were long-time executives of a major national yoga business, Yoga to the People (“YTTP”), from which they all received substantial income, but none of the three defendants produced filing for individuals or businesses – or paid no income taxes – from at least 2013 through 2020. GUMUCIO, ANDERSON and SOLIMAN were arrested today in Washington State. GUMUCIO and SOLIMAN will appear before Magistrate Judge David W. Christel in the Western District of Washington (Tacoma Division), and ANDERSON will appear before Magistrate Judge Mary Alice Theiler in the Western District of Washington (Seattle Division).

US Attorney Damian Williams said: ‘As alleged, the defendants operated a lucrative nationwide yoga business, which grossed over $20 million and earned them substantial sums, enabling them to lead a living sumptuous. Yet the defendants chose not to file tax returns or pay income taxes for at least seven consecutive years. The defendants perpetrated their scheme in a variety of ways, including paying employees in cash and off the books, refusing to provide employees with tax documents, failing to keep books and records, paying personal expenses from accounts businesses and using nominees to disguise their connection to various entities. . At least two of the defendants even submitted fabricated third-party tax returns while seeking a loan or an apartment, despite not filing any tax returns with the IRS. Thanks to hard investigative work, the defendants now face serious charges for their alleged crimes.

IRS-CI Special Agent-in-Charge Fattorusso said, “Defendants claimed to be creating a donation-based exercise community to make yoga more accessible to their clients, when in reality they allegedly ruled a decade-plus cash cow that relied on a sophisticated web of tens of millions of dollars in unreported income and free labor to fund the executives’ lavish lifestyles. Today’s arrests and charges are the first salvo against this years-long scam and the first step in holding these defendants accountable for their alleged crimes.

DOL-OIG Special Agent in Charge, Joseph Mellone, said: “An important part of the Office of Inspector General’s mission is to ensure that workers receive the wages to which they are entitled and that contributions appropriate unemployment insurance benefits are deducted from their wages and remitted to the relevant tax office. We will continue to work with our law enforcement partners to investigate these types of allegations.”

According to the allegations contained in the complaint:[1]

In or around 2006, GUMUCIO founded YTTP in New York, New York. YTTP was originally donation-based: YTTP requested, but did not require, payment from its yoga students. YTTP started out as a yoga studio on Manhattan’s Lower East Side, and it’s become extremely popular. Over the years that followed, YTTP opened at least about 20 yoga studios or affiliated entities throughout New York City and in various other locations, including California, Colorado, Arizona, Florida, and Utah. Washington State. YTTP also had a teacher training program, which brought substantial income to aspiring yoga teachers. YTTP operated from at least around 2006 until 2020. From 2010 to 2020, YTTP and its affiliates generated gross revenue of over $20 million. Yet YTTP has never filed a tax return with the IRS.

The management of YTTP included GUMUCIO, ANDERSON and SOLIMAN. GUMUCIO was the founder, main owner and functional general manager of YTTP, while leading and making decisions for the YTTP business. ANDERSON was owner of YTTP and functional CFO; he was involved in, among other things, negotiating leases for YTTP entities, obtaining employer identification numbers from the IRS, opening bank accounts and working with GUMUCIO to expand YTTP. SOLIMAN owned YTTP, its Director of Communications, the Director of Education for YTTP’s Teacher Training (“TT”) program, and was actively involved in YTTP’s efforts to expand internationally.

GUMUCIO, ANDERSON, and SOLIMAN each received a significant amount of income from YTTP, but none of the three defendants filed personal tax returns with the IRS for any calendar year from 2013 through 2020, inclusive. Using conservative numbers, for calendar years 2015 through 2020, GUMUCIO had unreported income directly from YTTP exceeding $1.6 million and tax due and owing to the IRS exceeding approximately $431,000; ANDERSON had unreported income directly from YTTP exceeding $2.1 million and taxes due and owing to the IRS exceeding approximately $603,000; and SOLIMAN had unreported income directly from YTTP exceeding $961,000 and tax due and owing to the IRS exceeding approximately $196,000. During the imputed period, GUMUCIO, ANDERSON and SOLIMAN each accounted for their six-figure annual income to third parties not associated with the government (for examplein loan applications, rental applications and/or bank documents), but none of them filed individual tax returns.

During the period charged, although they filed no tax returns and paid no income tax, GUMUCIO, ANDERSON and SOLIMAN led extravagant lifestyles, which included frequent trips abroad ; expensive meals and clothing; NFL season tickets; and equestrian accommodation and riding.

YTTP and its leaders, including GUMUCIO, ANDERSON and SOLIMAN, used various methods to evade tax, including:

  • Accept payments from yoga students in cash (for examplewhich were collected in boxes of tissues distributed during yoga classes) and paying yoga teachers in cash and “off the books”;
  • Using nominees to conceal Defendants’ connection to various entities which, in fact, were part of the YTTP business and from which GUMUCIO, ANDERSON and SOLIMAN all received income; to this end, GUMUCIO generally targeted and groomed young women and others to become nominated “owners” of studios, enticing them with the title of studio owner when in fact he generally controlled the decisions companies, took a share of their profits, and the candidates generally assumed significant financial risks;
  • Generally prohibiting YTTP teachers from counting incoming money that yoga students have paid and requiring yoga studio directors to transport cash proceeds to GUMUCIO’s apartment on St. Marks Place in Manhattan, where these proceeds were “stacked” and counted on so-called “stacking parties”;
  • Failure to maintain a registered office or maintain corporate books and records;
  • Use YTTP business accounts to pay defendants’ personal expenses; and
  • Maximizing undeclared income, as GUMUCIO manipulated his subordinates into providing free labor (for exampleteaching unpaid classes, stacking money, cleaning yoga studios, depositing money in bank accounts, etc.).

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GUMUCIO, 61, of Cathlamet, Wash.; ANDERSON, 51, of Bellevue, Wash.; and SOLIMAN, 33, of Cathlamet, Wash., are each charged with (i) one count of conspiracy to defraud the IRS, which carries a maximum sentence of five years in prison; and (ii) five counts of tax evasion, each carrying a maximum penalty of five years in prison.

The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of defendants will be determined by the judge.

Mr. Williams praised the outstanding efforts of the IRS-CI, DOL-OIG and Special Agents of the US Attorney’s Office for the Southern District of New York. Mr. Williams also thanked the U.S. Attorney’s Office for the Western District of Washington for their assistance.

Mr. Williams also noted that the investigation is ongoing. If you believe you have information about the defendants, this case, or if you believe you are a victim of a crime related to YTTP, please email [email protected]

This matter is being handled by the Bureau’s Complex Fraud and Cybercrime Unit. Assistant United States Attorney Michael D. Neff is in charge of the prosecution.

The charges contained in the complaint are only accusations and the defendants are presumed innocent until proven guilty.

[1] As the introductory sentence indicates, the entire text of the complaint and the description of the complaint below are allegations only, and each fact described should be treated as an allegation.