Real Hair Truth Michael Gordon busted after IRS says he hid $29.6 Million!

TOO MUCH OFF THE TOP: Michael Gordon has been busted for allegedly trying to skirt the IRS.

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


The Real Hair Truth:Solving the Problem of Mislabeled Organic Personal Care Products

Every professional should know about the diction and definitions of organic products within our industry. The language of ingredients can be very vague at times and also very confusing. At no time would I personally take the information from a manufacturer and believe it. Go outside of your industry to chemists or your local state college to get the proper information on the ingredients listed in your salon products. If an individual sends you products without proper labeling and is just wrapped in tissue, BEWARE! How do you know if the product is “SAFE”. There are a lot of “MOM&POP” businesses who will start-up in their own homes and will visit a MICHAEL arts and craft store to purchase wax, scents, soaps and “WELLAH”, you have a supposedly ORGANIC PRODUCT”. Beware what you buy in the Beauty Industry and have it tested. You can go to your state college and the college will test the products you received for little to nothing. You can also hire a chemist and have a ingrediant  test done on the products. Below this is the official information from the USDA on Labeling of Organic Hair Care. You should know this take the time to educate yourself of the information the USDA offers us in the Beauty Industry. Look for the USDA organic seal on shampoos that claim to be organic. Although there are multiple “organic” and “natural” standards, each with its own varying criteria, the USDA Organic Standards are the “gold standard “for personal care products”.

The Certification, Accreditation, and Compliance Committee (CACC) recommends that organic personal care products be recognized explicitly by the National Organic Program (NOP) to ensure consumers and businesses alike that the products have an unquestioned home in the USDA National Organic Program.

Background: The policy statement of the USDA on August 23, 2005 extended the USDA regulations to cover the organic claims made by personal care products which meet the composition requirements for organic food. With this recognition has come the full force of certification and enforcement. While this is an improvement over what previously existed, an ever-increasing stream of personal care products making organic claims continues to flow in to the market place. In an April 2008 news bulletin, the NOP further explained USDA organic certification of cosmetics, body care products, and personal care products. Most recently, in July 2009, the NOP published a “DRAFT FOR COMMENT ONLY: Certification and Labeling of Soap Products Made From Agricultural Ingredients.” The Appendix contains these 3 NOP statements. None of these statements were developed through the Federal Rulemaking process, neither is it certain how durable these various statements will be at NOP.

Cosmetics, Body Care Products, and Personal Care Products

The Problem of Mislabeled Personal Care Products

The USDA is responsible for product organic claims but is not currently enforcing this in the area of personal care products. Consumers are not assured that organic claims are consistently reviewed and applied to the class of products known as personal care products. For instance, at a given retailer, one may find personal care products such as shampoos and lotions labeled as “organic” with no clear standards or regulatory underpinning for the organic claim–and unless the product is specifically labeled as “USDA Organic,” the word “organic” may be used with impunity. Manufacturers of personal care products that contain organic ingredients are hindered by a thicket of competing private standards and confusion regarding the applicability of the NOP to their products. Transactions lack the regulatory clarity that applies under the NOP to food products that contain organic ingredients.

Given the pace of development of this marketplace, and the important but uneven development of private standards, the NOP should take the necessary initial steps to bring this product class into a coordinated existence with organic food products under the regulation.

This recommendation takes the initial steps toward:

3) assuring consumers that the federal government is policing organic claims on personal care products

4) allowing for the development of a complete federal organic personal care product program


To facilitate the development of a single national standard for this product class, and to ensure consumers that organic personal care products meet a consistent standard, the CACC recommends that the following amendments be made to 7 CFR Part 205. Underlined text is to be added to the current rule.

1. §205.102. Add Definition of Personal Care Products:

(1) An article intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance

2. §205.100(a) Add words “including personal care products”

Except for operations exempt or excluded in § 205.101, each production or handling operation or specified portion of a production or handling operation that produces or handles crops, livestock, livestock products, or other agricultural products including personal care

products that are intended to be sold, labeled, or represented as “100 percent organic,” “organic,” or “made with organic (specified ingredients or food group(s))” must be certified according to the provisions of subpart E of this part and must meet all other applicable requirements of this part.

3. §205.102 Use of the term “organic.”

Any agricultural product, including personal care products, that is sold, labeled or represented as “100 percent organic,” “organic,” or “made with organic (specified ingredients or food group(s))must be: * * *

4. §205.300 Use of the term, “organic.”

(a) The term, “organic” may only be used on labels and in labeling of raw or processed agricultural products, including ingredients of any product, without regard to the end use of the product, that is sold, labeled or represented as “100 percent organic,” “organic,” or “made with organic (specified ingredients or food group(s))must be: * * *

5. §205.311 USDA Seal

(a) The USDA seal described in paragraphs (b) and (c) of this section may be used only for farm or processed agricultural products, including personal care products, described in paragraphs * * *

The National Organic Program (NOP) has received numerous inquiries regarding its current thinking on the issue of products that meet the NOP program standards for organic products based on content, irrespective of the end use of the product. This statement is intended to clarify the NOP’s position with respect to this issue, and will be provided to all of our accredited certifying agents.

Agricultural commodities or products that meet the NOP standards for certification under the Organic Foods Production Act of 1990, 7 U.S.C. §§ 6501- 6522, can be certified under the NOP and be labeled as “organic” or “made with organic” pursuant to the NOP regulations, 7 C.F.R. part 205.300 et seq. To qualify for certification, the producer or handler must comply with all applicable NOP production, handling, and labeling regulations.

Operations currently certified under the NOP that produce agricultural products that meet the NOP standards to be labeled as “organic” and to carry the USDA organic seal, or which meet NOP standards to be labeled as “made with organic,” may continue to be so labeled as long as they continue to meet the NOP standards. Such certification may only be suspended or revoked after notice and opportunity for hearing.

There are agricultural products, including personal care products, that, by virtue of their organic agricultural product content, may meet the NOP standards and be labeled as “100 percent organic,” “organic” or “made with organic” pursuant to the NOP regulations. Businesses that manufacture and distribute such products may be certified under the NOP, and such products may be labeled as “100 percent organic,” “organic” or “made with organic” so long as they meet NOP requirements. Additionally, products that may be labeled “100 percent organic” or “organic” may also carry the USDA organic seal. If additional rule making is required for such products to address additional labeling issues or the use of synthetics in such products, the NOP will pursue such rule making as expeditiously as possible.

2) Cosmetics, Body Care Products, and Personal Care Products, April 2008

● FDA does not define or regulate the term “organic,” as it applies to cosmetics, body care, or personal care products.

● USDA regulates the term “organic” as it applies to agricultural products through its National Organic Program (NOP) regulation, 7 CFR Part 205.

● If a cosmetic, body care product, or personal care product contains or is made up of agricultural ingredients, and can meet the USDA/NOP organic production, handling, processing and labeling standards, it may be eligible to be certified under the NOP regulations.

● The operations which produce the organic agricultural ingredients, the handlers of these agricultural ingredients, and the manufacturer of the final product must all be certified by a USDA-accredited organic certifying agent.

● Once certified, cosmetics, personal care products, and body care products are eligible for the same 4 organic labeling categories as all other agricultural products, based on their organic content and other factors:

 “100 percent organic”–Product must contain (excluding water and salt) only organically produced ingredients. Products may display the USDA Organic Seal and must display the certifying agent’s name and address.

 “Organic”–Product must contain at least 95 percent organically produced ingredients (excluding water and salt). Remaining product ingredients must consist of nonagricultural substances approved on the National List or nonorganically produced agricultural products that are not commercially available in organic form, also on the National List. Products may display the USDA Organic Seal and must display the certifying agent’s name and address.

“Made with organic ingredients”– Products contain at least 70 percent organic ingredients and product label can list up to three of the organic ingredients or “food” groups on the principal display panel. For example, body lotion made with at least 70 percent organic ingredients (excluding water and salt) and only organic herbs may be labeled either “body lotion made with organic lavender, rosemary, and chamomile,” or “body lotion made with organic herbs.” Products may not display the USDA Organic Seal and must display the certifying agent’s name and address.

Less than 70 percent organic ingredients–Products cannot use the term “organic” anywhere on the principal display panel. However, they may identify the specific ingredients that are USDA-certified as being organically produced on the ingredients statement on the information panel. Products may

not display the USDA Organic Seal and may not display a certifying agent’s name and address. (Water and salt are also excluded here.)

● Any cosmetic, body care product, or personal care product that does not meet the production, handling, processing, labeling, and certification standards described above, may not state, imply, or convey in any way that the product is USDA-certified organic or meets the USDA organic standards.

● USDA has no authority over the production and labeling of cosmetics, body care products, and personal care products that are not made up of agricultural ingredients, or do not make any claims to meeting USDA organic standards.

● Cosmetics, body care products, and personal care products may be certified to other, private standards and be marketed to those private standards in the United States. These standards might include foreign organic standards, eco-labels, earth friendly, etc. USDA’s NOP does not regulate these labels at this time.

Certification and Labeling of Soap Products Made From Agricultural Ingredients

The Organic Foods Production Act of 1990 (OFPA), 7 U.S.C. Section 6501, et. seq ., as amended, and implemented in 7 CFR Part 205, National Organic Program (NOP) Final Rule, regulates the production, handling, processing, and labeling of all raw or processed agricultural products to be sold, labeled, or represented as organic in the United States. In an August 23, 2005 policy statement issued by the NOP, the Program clarified that agricultural products may be certified and labeled in accordance with the Act and its implementing regulations regardless of end use. The statement allows for certain products, such as soaps, to be certified under the NOP, providing they comply with 7 CFR 205.

This document describes the interim procedures to be used by certified operations and certifying agents accredited by the U.S. Department of Agriculture (USDA) to certify and label soap products as “organic” or “made with organic [specified ingredients]”, referred to throughout this document as “made with” products.

Soap is produced by a process called saponification, whereby oils are hydrolyzed by the addition of an alkali, yielding soap, glycerin, water and other byproducts. Glycerin is produced by this process and has been determined by the National Organic Standards Board (NOSB) to be a synthetic and appears on the National List of Allowed and Prohibited Substances as such. (Insecticidal soaps are permitted under 205.601 for crop production.)

The NOP has been asked to provide guidance on the labeling of soap that has been formulated and produced in accordance with the NOP regulations.

Some in the industry have expressed concern that allowing certification and labeling of soap as organic is a violation of OFPA. We disagree. The processing of agricultural products in accordance with NOP regulations often results in chemical or physical changes, many of which may involve the synthesis of new compounds. For example, the processes of baking bread or cooking meat create changes in the products that may involve the creation of new compounds. However, neither of these common products are viewed as synthetic under the regulations. Our interest is to create a consistent, fair policy that can be applied uniformly in a variety of situations. Therefore, we base our analysis of the process on the NOP regulations. The NOP regulations describe the inputs and processing which take place in the formulation and

manufacturing of a finished product; they do not prescribe the nature of the finished product itself. This allows agricultural products and allowed synthetics to be used to create a wide variety of products which may be eligible for certification, regardless of end use. Further, identification of products produced in compliance with the NOP regulations, and the percentage of organic products that they contain, allows for subsequent formulation into products which retain their eligibility for labeling as organic or “made with” organic products, depending upon the percentage of organic ingredients used to create the product. This allows producers to retain the added value of organic products throughout the production process and provides consumers with a choice when searching for products that contain organically produced ingredients.

In general, products that have been formulated in compliance with the NOP regulations may be eligible for certification as “organic” or “made with” products. Further, products produced in compliance with the regulations should be eligible for further processing and certification based on their true organic component content. Thus, a formulated product produced using 75% organic ingredients and 25% allowed synthetics is eligible for certification as a “made with” product. In addition, the “made with” products should carry a certified organic content of 75% when used in subsequent down-stream processing, under the condition that full disclosure of its organic content and other ingredients is provided by the manufacture. If a soap is produced using 80% certified organic oil and 20% sodium hydroxide, the soap would be eligible for certification as a soap “made with organic oils.” Further, the soap “made with organic oils” may be processed downstream into other products using 80% as the organic content for those calculations.

Labeling of these products should be consistent with labeling done for any other certified organic processed product, with full disclosure of the ingredients in the ingredient statement on the information panel. This should include all certified organic ingredients and any synthetics used to produce the product. Although Food and Drug Administration (FDA) regulations allow downstream processors to list “saponified organic oils” in the ingredient statement, FDA does not prohibit full disclosure of the organic and synthetic ingredients, consistent with NOP regulations. Therefore, ingredient statements for products containing saponified oils must include the name of the actual organic ingredient and the synthetic ingredients used to create the soap. If the saponified oils are produced as a part of a separate process, they may be listed as a parenthetical statement, such as “saponified organic oils (organic coconut oil, potassium hydroxide), water, glycerin, beet juice color.”

Guidance: Soap products formulated using certified organic oils and materials included on the National List may be certified and labeled as “organic” or “made with organic [specified ingredients].” Further, when manufacturers of saponified organic oils produce such products in compliance with the regulations and provide certified formulations to downstream processors, they may be further processed into “organic” or “made with” products.

When saponified oils are produced by a certified organic handler and are to be sold as “made with organic oils” for further processing into certified “organic” or “made with” products, they must be accompanied by a complete ingredient statement which gives the actual percentage of the organic ingredients contained in the “made with” product. When labeling products produced with saponified oil, the ingredient statement of the further processed product must include the ingredients used to produce the saponified oil. As an option, the saponified organic oil may be stated on the ingredient statement followed by a parenthetical statement. Listing the saponified oils without listing the ingredients used to produce the saponified oils is not sufficient.

Procedures: As always, certifiers must review and approve all organic handling plans for products produced with saponified oils, including the ingredient statements for the saponified oils themselves, prior to issuing certification for handling operations producing these products. Producers of saponified oils to be further processed into other personal care products must provide statements of the type and percent of all ingredients used to produce the saponified oils so that this information may be included in the ingredient statement of the finished product. All labels for certified organic soaps and products containing saponified oils must be reviewed and approved by the certifying agent prior to printing and labeling.

This is what they, dont want YOU to know!

Workers have a right to a safe workplace. The law requires employers to provide their employees with working conditions that are free of known dangers. OSHA provides information, training, and assistance to workers and employers. Be aware that in our industry manufacturers are deceptive. They want you to buy their products, and will customize class’s in order for you to be presented with their latest and greatest lotions, powders, soaps etc.  I was talking with a very very bright gentleman of the next film “Beautiful LieS”. He said a statement that really hit home to me. When a professional buys a ticket to a hair show such as “Premier, NAHA, Cosmoprof, etc” why should they buy the products there, if they can find the products in a commercial outlet. The major manufacturers have given up on LOYALTY TOO YOU and SELLING EXCLUSIVE products to the business professional in our industry. I would not even give a current hair show the time of day. I can see their products in a store. I thought our products supposed are supposed to be exclusive, and only sold in salons. Come on! And do you really know what ARE the ingredients you are using in your salon products? And most of you products you use in the salon for Hair coloring, Keratin treatments, Permanent waves can be purchased by the consumer. Where did our exclusive go???? The MAJOR manufacturers have sold us out. In this months edition of 90% of the products advertised in this magazine are found in the commercial sector or on the internet. Available to the consumer at their finger tips. Basically its the magazine of the “Brainwashed’. And the topics of literature in the magazine are the same ol, same ol! Be responsible everyone, and be the change The Real Beauty Industry needs. Change in this industry has to come from you! Then others will see you as a role model and you will set the standard for others.

Walk the Walk everyone!

Take back your industry!

You will see the latest in industry magazines everyone,”How To” of the layered haircut with a Ombre color or join Farouk’s Dream Team, Learn client consultation. But not touching on the politics of a industry broken by Major Manufacturers. 

They dont want you to know, what they know, that you dont need to know. See this is what they want you to know, “Keep the Young Dumb, and don’t worry were looking out for you”. “We are your legal representative of the Beauty Industry as the PBA.ORG would say, REALLY?”  Take it upon yourself to know your products, and all the ingredients in the products. Your customers health and yours is very important. And I would not like to see anyone gain an illness because the greed of a manufacturer cannot be controled. If you work in a salon go to the owner and ask for the MSDS sheets of the products you use for your salon services. Know what you are using. Its your body. And you get only one go around in this lifetime! You are all very, very special people. And you cannot be replaced.

OSHA will continue to conduct inspections in response to complaints and/or referrals. Workers may file a complaint to have OSHA inspect their workplace if they believe that their employer is not following OSHA standards or that there are serious hazards. Employees can file a complaint with OSHA by calling 1-800-321-OSHA (6742) or by printing out the complaint form and mailing or faxing to your local OSHA area office. Complaints that are signed by an employee are more likely to result in an inspection. 

OSHA can help answer questions or concerns from employers and workers. Contact your local OSHA office if you have any questions about a product that you are using or its material safety data sheet (MSDS). To reach your regional or area OSHA office, go to OSHA’s Regional & Area Offices web page. 

Hair salon owners and beauty schools can contact OSHA’s free and confidential on-site consultation service to help determine if there are hazards at their salon and work with OSHA on correcting any identified hazards. On-site consultations services are separate from enforcement activities and do not result in penalties or citations. To contact OSHA’s free consultation service, go to OSHA’s On-Site Consultationweb page or call 1-800-321-OSHA (6742) and press number 4. 

Salon owners and workers can also request the National Institute for Occupational Safety and Health, at no cost, to help identify and correct any health hazard in the workplace through its Health Hazard Evaluation Program. Contact NIOSH at 1-800-CDC-INFO [1-800-232-4636].

Claudia Diesti Big Day of Shooting for Her Educational DVD!

No ego’s, no stars, no attitudes that is how I describe the 2 full days we shot with Phil Stone, Claudia Diesti, Dan Diesti, Dan Cunningham, La’Niece, Matt Fienman, and myself. This was the start for Claudia’s DVD on haircoloring, haircutting, hairstyling, and a biography of herself and her beliefs. These 2 days were filled with the most remarkable, ambitious, giving professionals that could be put together in one room. So many different professionals were there to pull this off. And so much clowning around to the fullest extent, that I would love to do this again with the same exact group. This was Phil Stones first taping of an educational DVD series for his website REWIREDHAIR.COM.  And Dan Cunningham who filmed and edited the documentary THE REAL HAIR TRUTH took on this undertaking  with Matt Fienman who was also in charge of videography.  And Dan Diesti Claudia’s husband was the everything role. From food, to hair supplys, to makeup to wardrobe. Dan did it all. And for once I could kick back and just do makeup and I also helped with the photoshoot. Either way we did a little of everyone’s profession with the staff for the DVD. And learning was top on the agenda with this shoot.

Learning was on everyone’s mind the past two days with this shoot. Phil with Dan learning Videography, Myself learning from Claudia – Balayage, everyone had education on their minds. And getting the proper filming within this two-day event was close to 24 hours of filming, setting up the stage, supply runs, etc. But we all pulled together to shoot Claudia and get the best footage we could possibly get for her DVD.  All in all we all got the job done and there was a moment in time that I will always remember these two days of my career, That we all pulled together and did a positive for everyone, the Industry, Claudia, Phil, everyone. And to get that type of group together is sheer priceless. And all the time went so very fast I will truly remember this DREAM. Or maybe this wonderful moment.

Thank You Phil, Claudia, Dan, Daniel, Matt, La’Niece, and all the models.

Joseph Kellner