The founder and co-owner of Yoga to the People, a wildly successful chain of studios that began in the East Village of Manhattan and later spread to nearly half a dozen states outside New York before closing in 2020, pleaded guilty to federal tax evasion on Friday.
Gregory Gumucio, the founder and co-owner, received more than $3.5 million in income between 2012 and 2020 but did not file individual or business tax returns or pay income taxes for at least eight consecutive years, according to federal prosecutors. He faces up to five years in prison for the tax evasion charge and will be sentenced in January.
Mr. Gumucio has agreed to pay at least $2.5 million in restitution to the Internal Revenue Service under the terms of his plea agreement.
Damian Williams, the U.S. attorney in Manhattan, said in a statement that Mr. Gumucio had “built a thriving yoga business yet chose to evade his tax obligations for nearly a decade,” before adding that his office was “committed to holding individuals accountable who fail to pay their fair share.”
Yoga to the People began as a small studio in the East Village in 2006. It had a pay-what-you-can model and, in its early years, an enviable roster of instructors, including Hilaria Baldwin, the social media influencer and wife of the actor Alec Baldwin. Sofia Kristina Hellqvist, a Swedish reality star, taught for the chain, dated Mr. Gumucio and later became Princess Sofia, Duchess of Värmland, after marrying into the nation’s royal family.
But the studio’s bohemian glamour was built on a foundation of financial illegality, prosecutors said. In court on Friday, Mr. Gumucio, 63, apologized for not paying taxes.
“I knew I owed the money and I was aware that other people were aware,” he said. “I apologize.”
Mr. Gumucio, who lives in Colorado, was arrested in 2022, along with Michael Anderson, a co-owner and chief financial officer, and Haven Soliman, a co-owner and chief communications officer who also served as director of education. They were each charged with conspiracy to defraud the I.R.S. and five counts of tax evasion.
Federal officials said Mr. Gumucio owed the I.R.S. more than $431,000 from 2015 to 2020, while Mr. Anderson owed the agency more than $603,000 and Ms. Soliman owed more than $196,000. Prosecutors accused them of spending lavishly, including on foreign travel, N.F.L. season tickets, horseback riding and expensive meals and clothing. Both Ms. Soliman and Mr. Anderson pleaded not guilty in 2023 and are set to face trial in January.
The Manhattan studio was often packed with yogis, with every inch of its hardwood floors covered in mats. People, especially college students, were attracted to its loose payment structure — a noticeable difference from other studios in the area that could charge around $30 per class.
Over the years, the chain opened at least 20 studios or affiliates throughout New York City and elsewhere, including in California, Colorado, Arizona, Florida and Washington State. It also offered a teacher training program. Prosecutors said that from 2010 to 2020, the chain generated more than $20 million.
But in 2020, former students and employees began to share damning stories online about Mr. Gumucio, accusing him of sexually preying on teachers and students, using racial slurs in the workplace, discriminating against employees of color, failing to file tax forms and encouraging teachers to conceal their income. Those allegations were first reported by Vice News. The chain closed in 2020.
Two years later, the founder and co-owners were arrested. Prosecutors said they had evaded taxes by accepting cash payments from students and by paying teachers in cash “off the books.”
Donations were collected in tissue boxes passed around at the studios like collection plates at church. The donations were brought to Mr. Gumucio’s home in Manhattan, where he would have “stacking parties,” during which the money would be counted, according to federal prosecutors.
Prosecutors also said that Mr. Gumucio had forced his subordinates to provide free labor, such as teaching unpaid classes and cleaning studios.
Those accused also failed to maintain a corporate headquarters or keep financial records and used business accounts to pay for their personal expenses, prosecutors said. Mr. Gumucio also trained young women and others to become “owners” of studios but he controlled the business decisions, prosecutors said, and took a cut of their proceeds while they took on financial risk.
After the proceeding, Mr. Gumucio put on a baseball cap and walked out of the courthouse, head down, lips pursed and ignoring questions from reporters.
The post Yoga to the People Founder Pleads Guilty to Tax Evasion appeared first on New York Times.
