Bumble and Bumble salon mogul arrested over allegation that he tried to hide $29.6m from the IRS
21:21 GMT, 16 November 2012
The founder of New York's successful salon brand, Bumble and Bumble, was arrested last Friday for alleged tax evasion and money laundering, it was claimed today.
According to the New York Post, Michael Gordon, 61, failed to notify the the Internal Revenue Service about the $29.6million he received after selling a stake of his company to Estee Lauder in 2006.
The criminal complaint filed, reportedly describes that the British-born hairdresser and entrepreneur was 'actively seeking ways to hide the money from the IRS, including
sending money overseas'.
Bumble and Bumble founder Michael Gordon has been arrested for alleged tax evasion and money laundering, it was claimed today
Instead of reporting the earnings, he allegedly presented a gross income of $1,350,883 that year and a taxable income of $1,124,844 and even received a refund of $39,298.
The tabloid claims that during a meeting with an IRS investigator last month, Gordon said that he didn't know the sum of money had to be reported on his 1040 income tax
After establishing himself as a hairdresser in some of London's top salons as a teenager, Gordon moved to New York in the early Eighties.
His Meatpacking District hair salon opened in 1977, and Vogue later named it as one of best in the U.S.
He later started selling his own hair care products, and by 1999 he was estimated to be selling about $25million worth of styling aids.
Popular brand: Bumble and Bumble operates two flagship salons in Manhattan and has hundreds of haircare products
It was this that attracted cosmetics giant Estee Lauder, and in 2006 he sold a 60per cent stake in his salon and product line to the company.
At the time he said it was so he could establish a presence outside of North
America, telling SalonNews: 'We are in many great prestige doors overseas, but the
international arena is not big for us.
'Lauder has amazing
expertise in international – it's really a different world, and it
requires a lot of capital and a lot of expertise in many specialized
Today celebrities such as Kim Kardashian, Kristen Bell and
singer Ke$ha are counted as fans of the Bumble and Bumble brand.
The New York Post added that Gordon
submitted papers at his arraignment stating that he lived in a $16million apartment with a $3million mortgage.