Founder of Bumble and Bumble Salon in Trouble with the IRS

According to a recent article in the New York Times, court documents filed late last week indicated that the founder of the salon and hair-product company Bumble and Bumble failed to pay taxes on the $29.6 million dollars.

Michael Gordon, the salon tycoon who grew the company from a single salon to an international company of salons and hair care products, received the money after selling his stake in the company, but failed to report the sale proceeds on his 2006 tax returns, according to prosecutors. Mr. Gordon only reported only his yearly income on his returns, and did not the millions he made off the sale. Instead of paying taxes, he reported that he was owed a refund of over $39,000 from the IRS.

When confronted with the failure to report the money on his returns by an IRS agent, Mr. Gordon denied knowing that the money from the sale had not been included on the returns. Unfortunately for Mr. Gordon, the IRS agent had information from a confidential informer close to Mr. Gordon who stated otherwise. Eric Nieves, the IRS agent, received information that Mr. Gordon had not only knowingly failed to disclose the income, but was also actively engaged in finding ways to avoid paying taxes.

According to a spokesperson for the United States attorney prosecuting the case, investigators arrested Mr. Gordon at his place of residence last week. The spokesperson confirmed charges had been filed against Mr. Gordon for lying to a federal agent, but he declined to give any further information regarding the case.

Because the judge deemed Mr. Gordon a flight risk, police held Mr. Gordon after his arrest in Manhattan. Mr. Gordon was released on Thursday after he agreed to a $4 million bond.

Michael J. Rosen, Mr. Gordon’s attorney, assured people that Mr. Gordon’s arrest was a result of the assessment that he was a flight risk. He promised that they are seeking to resolve the tax issue quickly.


Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999

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