Yoga Chain Was a Criminal Enterprise That Reaped Millions, Prosecutors Say
Yoga for the People started as a small studio in Manhattan’s East Village, where students pay only an optional contribution – the amount is up to them – to practice pranayamas and downward-facing dogs in tailored classes. with the hip of the city, fit and budget conscious.
It became a New York institution, with loyal staff of students and teachers, and quickly grew into a nationwide chain operating in half a dozen states. But on Wednesday, federal prosecutors said it was also a criminal enterprise that its founders used to collect millions of dollars that went unreported to the Internal Revenue Service for seven years.
The arrest of the founders and co-owners of the yoga empire – Gregory Gumucio, Michael Anderson and Haven Soliman – is the latest cloud over the once-popular chain, which closed in 2020 after it was rocked by the Alleged racism, questionable business practices and sexual assault on more than two dozen alumni and staff.
The co-owners were arrested in Washington State and were each charged with one count of conspiracy to defraud the IRS and five counts of tax evasion, according to a statement from the United States Attorney’s Office for the Southern District of New York. Prosecutors said the defendants made great efforts to conceal their income, which was not reported to the IRS between 2013 and 2020.
“The defendants implemented their scheme in a variety of ways, including paying employees in cash and off-the-books, refusing to provide employees with tax documentation, failing to keep books and records. records, pay personal expenses from corporate accounts and use their names to forge their connections to various entities,” said Damian Williams, United States attorney for the Southern District of New York, said in a statement. “At least two of the defendants even filed fabricated tax returns to third parties when seeking a loan or an apartment, despite not filing any tax returns with the IRS.”
Lawyers for Mr. Gumucio, Mr. Anderson and Ms. Soliman could not be immediately reached for comment on Wednesday.
Founded in 2006, Yoga to the People enjoyed massive success and enviable buzz at its peak.
Its instructors in its early years included a Swedish reality TV star, Sofia Kristina Hellqvist, who dated Mr. Gumucio and later married into the nation’s royal family in 2005. 2015, become Princess Sofia, Duchess of Värmland. Hilaria BaldwinSocial media influencer and wife of actor Alec Baldwin, also taught at the company before opening her own studio in 2010.
But the donate-only, pay-you-can structure of Yoga For Everyone, where practitioners will cash in their pockets for cash in a comfortable, no-frills studio, is the crux of the scam. founder. prosecutors said.
Donations deposited in tissue boxes were passed from student to student, like a church collecting disc, prosecutors said, accusing the organization The organization also pays teachers in addition to books and cash.
But teachers are forbidden to count money. In New York, cash was instead brought to Mr. Gumucio’s home on St. Marks Place in Manhattan, where bills were counted and stacked in what he called “stacking parties,” prosecutors said.
Teachers themselves are also an important source of income. As is the case with many yoga and Pilates studios, a yoga training program for residents is a reliable source of income for the business. Offered a few times a year, each aspiring teacher pays about $3,000.
The business also did not maintain corporate headquarters or keep financial records, prosecutors said, and the three founders used their bank accounts to pay their personal expenses. prosecutors said.
Mr. Gumucio often broke the law when he was young. He pleaded guilty to second-degree forgery in 1982, and theft the following year. He identified himself using aliases such as Charles Abbot, Richard Clayton and Paul R. Smith Jr., records show.
In 1986, he was charged with attempting to escape law enforcement custody in Colorado and sentenced to six years behind bars, records show, but it’s unclear how long he actually served. long. That same year, he committed motor vehicle theft.
In 2004, a Washington state woman accused him of rape, but the case was closed when she stopped cooperating with investigators.
In 2020, former students and staff began sharing complaints against Mr. Gumucio online. They accused him of sexually assaulting teachers and students, using racial slurs in the workplace, discriminating against employees of color, failing to use tax forms and encouraging teachers hide their income. The allegations were first reported by Vice News.
The financial crimes each alleged co-ownership reflect some of those allegations. Prosecutors said Mr. Gumucio “targeted and groomed often young women and others” to become owners of nominal new studios. They assumed financial risk for an affiliate even though he controlled its business decisions and cut the proceeds.
Prosecutors also allege that Mr. Gumucio entices his employees to work for free to reduce costs and maximize his income. Some of the tasks he forces them to do include cleaning up the yoga studios, piling up money at his apartment, depositing money in his bank account, and even teaching classes that he doesn’t have. no remuneration.
In court documents filed Wednesday, prosecutors outlined each co-founder’s spending to detail what they say were the fruits of these efforts.
For example, they said bank records show Ms Soliman spent more than $48,000 in 2017 and 2018 on her horses, including fees for shows, “horse hire”, boarding and shoes. . Between 2015 and 2020, Mr. Gumucio’s credit card statement shows more than $269,000 spent on flights, over $75,000 spent on hotels, more than $39,000 spent at restaurants, and over $30,000 per person spend at country clubs and event tickets.
He also used Yoga to People’s bank account to pay more than $158,000 in personal credit card bills during that time, prosecutors said.
Jan Ransom and Katherine Rosman contribution report.