Leadership of Yoga To The People arrested for tax fraud

 

Date: August 24, 2022

Contact: newsroom@ci.irs.gov

Damian Williams, the 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 U.S. 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 fraud for at least seven years. The three defendants were longtime leaders at a prominent nationwide yoga business, Yoga to the People ("YTTP"), from which they all received a substantial amount of income, yet none of the three defendants filed individual or business tax returns – or paid any income taxes – from at least 2013 through 2020. Gumucio, Anderson, and Soliman were arrested today in Washington State. Gumucio and Soliman will be presented before Magistrate Judge David W. Christel in the Western District of Washington (Tacoma Division), and Anderson will be presented before Magistrate Judge Mary Alice Theiler in the Western District of Washington (Seattle Division).

U.S. Attorney Damian Williams said: "As alleged, the defendants operated a lucrative nationwide yoga business, which brought in over $20 million and netted them each substantial sums, permitting them to live lavish lifestyles. 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 various ways, including paying employees in cash and off the books, refusing to provide employees with tax documentation, not maintaining books and records, paying personal expenses from business accounts, and using nominees to disguise their connection to various entities. At least two of the defendants even submitted fabricated tax returns to third parties when seeking a loan or an apartment, despite not filing any tax returns with the IRS. Thanks to dogged investigative work, the defendants now face serious charges for their alleged crimes."

IRS-CI Special Agent in Charge Fattorusso said: "The defendants purported to create a donation-based exercise community to make yoga more accessible for their clients, when in reality, they allegedly ran a more than decade-long cash cow that relied on a sophisticated network of tens of millions of dollars in unreported income and free labor to fund the leaders' lavish lifestyles. Today's arrests and charges are the opening salvo against this years-long scam and the first step to holding these defendants accountable for their alleged crimes."

DOL-OIG Special Agent-in-Charge Jonathan Mellone said: "An important part of the mission of the Office of Inspector General is ensuring that workers receive the wages that they are entitled to and that appropriate unemployment insurance taxes are withheld from their pay and remitted to the relevant tax authority. 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 with one yoga studio on the Lower East Side of Manhattan, and it became extremely popular. Over the ensuing years, YTTP opened at least approximately 20 yoga studios or affiliated entities throughout New York City and in various other places, including California, Colorado, Arizona, Florida, and Washington State. YTTP also had a teacher training program, which earned substantial income from aspiring yoga teachers. YTTP operated from at least approximately 2006 until 2020. From 2010 to 2020, YTTP and its affiliates generated gross receipts of more than $20 million. Yet YTTP never filed a corporate tax return with the IRS.

YTTP's leadership included Gumucio, Anderson, and Soliman. Gumucio was YTTP's founder, principal owner, and functional chief executive officer, as he directed and made decisions for the YTTP enterprise. ANDERSON was an owner of YTTP and the functional chief financial officer; 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 was an owner of YTTP, its Chief Communications Officer, 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 large volume of income from YTTP, yet none of the three defendants filed a personal tax return with the IRS for any calendar year from 2013 to 2020, inclusive. Using conservative figures, for calendar years 2015 to 2020, Gumucio had unreported income directly from YTTP exceeding $1.6 million and a tax due and owing to the IRS exceeding an estimated $431,000; Anderson had unreported income directly from YTTP exceeding $2.1 million and a tax due and owing to the IRS exceeding an estimated $603,000; and Soliman had unreported income directly from YTTP exceeding $961,000 and a tax due and owing to the IRS exceeding an estimated $196,000. During the charged period, Gumucio, Anderson, and Soliman each represented their annual income to be six figures to third parties not associated with the Government (e.g., in loan applications, rental applications, and/or bank documents), yet none of them filed an individual tax return.

During the charged period, despite not filing any tax returns and not paying any income taxes, Gumucio, Anderson, and Soliman enjoyed extravagant lifestyles, which included frequent foreign travel; expensive meals and clothing; NFL season tickets; and horse lodging and horseback riding.

YTTP and its leaders, including Gumucio, Anderson, and Soliman, used various methods to evade taxes, including, among others:

  • Accepting yoga students' payments in cash (e.g., which was collected in tissue boxes that were passed around during yoga classes) and paying yoga teachers in cash and "off the books";
  • Using nominees to disguise the defendants' connection to various entities which, in fact, were part of the YTTP enterprise and from which Gumucio, Anderson, and Soliman all received income; to that end, Gumucio targeted and groomed typically young women and others to become nominee "owners" of studios, luring them with the title of studio owner when, in fact, he generally controlled business decisions, took a cut of their proceeds, and the nominees generally took on meaningful financial risk;
  • Generally forbidding YTTP teachers from counting incoming cash that yoga students paid and requiring yoga studio managers to transport cash proceeds to Gumucio's apartment on St. Marks Place in Manhattan, where those proceeds were "stacked" and counted during so-called "stacking parties";
  • Failing to maintain a corporate headquarters or keep corporate books and records;
  • Using YTTP business accounts to pay the defendants' personal expenses; and
  • Maximizing unreported income, as Gumucio manipulated subordinates into providing free labor (e.g., teaching unpaid classes, stacking cash, cleaning yoga studios, depositing cash into bank accounts, etc.).
  • Gumucio, of Cathlamet, Washington; Anderson, of Bellevue, Washington; and Soliman, of Cathlamet, Washington, are each charged with (i) one count of conspiracy to defraud the IRS, which carries a maximum penalty of five years in prison; and (ii) five counts of tax evasion, each of which carries a maximum penalty of five years in prison.

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

Mr. Williams praised the outstanding efforts of IRS-CI, DOL-OIG, and the Special Agents of the U.S. 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 its assistance.

Mr. Williams also noted that the investigation is ongoing.

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

The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.