The IRS doesn’t take haircuts as payment.
The founder of Manhattan’s famed Bumble and bumble hair salons and product line has been busted for allegedly lying to tax investigators about $29.6 million he received after selling his stake in 2006, The Real Hair Truth has learned.
Michael Gordon, 61, of Manhattan, remains behind bars after allegedly telling an IRS investigator during a meeting last month that he didn’t know the income had to be reported on his 1040 tax return form. A federal warrant was issued and he was arrested and arraigned last Friday. The British native — who most recently produced a documentary on his late pal Vidal Sassoon that premiered last year at the Tribeca Film Festival and later partnered with fellow hair-salon owner Rodney Cutler of Cutler Salons — was deemed a flight risk by federal Judge Gary Brown and jailed. He sold his stake in Bumble and bumble to Estée Lauder in 2006 to pursue other interests and purchased homes in the Hamptons and Manhattan. But that financial jackpot has come back to haunt him six years later. The IRS has been conducting an investigation into his returns, and even used a confidential informant to build its case against him before last week’s arrest, according to court papers.
The canary — a friend of Gordon’s for roughly seven years — said Gordon openly discussed hiding the money from the taxman after securing the lucrative deal in 2006. The informant “told me that after the defendant received the income from the sale of Bumble and bumble, he was actively seeking ways to hide the money from the IRS, including sending money overseas, so that he would not have to pay taxes on that income,” a federal agent says in a criminal complaint. Instead of reporting the earnings, Gordon allegedly presented a gross income of $1,350,883 that year and a taxable income of $1,124,844. Instead of forking over hefty income tax on the $29.6 million, Gordon actually scored a refund of $39,298 in 2006, according to the complaint. Gordon submitted papers at his arraignment stating that he lived in a $16 million Manhattan apartment with a $3 million mortgage. Officially retired from wielding scissors, he listed his employer as his own company called, “If You Knew”, a hairstyling consulting firm made up of Bumble and Bumble alums. Cutler, who first worked at a Manhattan Bumble location and has called it the most influential salon in America, declined to comment. So sad for this Brit! BOO-HOO