Three owners of Yoga to the People, the former nationwide chain of donation-based yoga classes, were arrested by federal agents on Wednesday in Washington state on tax evasion charges.
Founder Gregory Gumucio, de facto CFO Michael Anderson, and chief communications officer Haven Soliman did not file individual or business tax returns, nor pay any income taxes, between at least 2013 and 2020, the Department of Justice said in a criminal complaint.
"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," US Attorney for the Southern District of New York Damian Williams said in a statement. "Yet the defendants chose not to file tax returns, or pay income taxes, for at least seven consecutive years."
Charge Fattorusso, a special agent at the IRS, described Yoga to the People as a "years-long scam."
"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," Fattorusso said.
Gumucio, 61, founded Yoga to the People in Manhattan's East Village in 2006, billing it as donation-based studio where participants could pay what they wanted. Over the years, the business became wildly popular and expanded to more than 20 studios or affiliates in California, Colorado, Arizona, Florida, and Washington state. They also instituted a profitable teacher training program.
Between 2010 and 2020, the business was said to have generated more than $20 million in gross receipts, but officials said the company never filed a corporate tax return.
The business shuttered in July 2020, ostensibly due to the pandemic, but Vice and New York magazine had been investigating of a "cult-like" environment that masked racism, as well as alleged predatory behavior by Gumucio.
Per the criminal complaint, Yoga to the People avoided taxes by accepting customer payment in cash via tissue boxes passed around during classes. Teachers, who were generally forbidden from counting the income, were later paid themselves in cash and "off the books."
The three defendants also allegedly paid for personal expenses using business accounts.
Officials said that between 2015 and 2020, Gumucio had an unreported income of $1.6 million, Anderson had $2.1 million, and Soliman had $961,000. They owed $431,000, $603,000, and $196,000 in taxes, respectively, but did not file any tax returns, authorities said. (Per an old company website, Gumucio and Soliman were also married.)
Prosecutors said the trio spent lavishly during this period, with Gumucio forking out almost $270,00 to United Airlines and $76,000 on hotels. For three years, he also held Denver Broncos season tickets worth more than $40,000.
All three have been charged with one count of conspiracy to defraud the IRS and five counts of tax evasion. All the counts carry a maximum penalty of five years in prison, meaning the trio are facing a combined total of 30 years behind bars.
Lawyers for the defendants, who were due to make court appearances later on Wednesday, were not yet listed online.