Dolce And Gabbana Found Guilty Of Tax Evasion

By Jessica Rawden 2013-06-20 14:42:48
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Famous Italians Domenico Dolce and Stefano Gabbana are mostly known for the high-end fashion line Dolce & Gabbana, but soon the two designers names may become more synonymous with tax evasion. On Wednesday, an Italian court dropped a heavy sentence on the two designers, announcing both Dolce and Gabbana have earned 20 months in prison for the alleged evasion, as well as a €500,000 fine.

Early on and throughout the court case, both designers have repeatedly stated they are not guilty of the Italian court’s charges. The case goes back to a sale the designer fashion firm made back in 2004. One of the company’s brands was sold to the Luxembourg-based holding company Gado. Since Luxembourg has an almost nonexistent corporate sales tax and Italy’s corporate sales tax is closer to 28%, the Italian prosecution team argument was that the company was sold to avoid taxes on royalties.

The two men are still claiming to lack guilt and will use one or both of the two possible appeals allowed via Italian law in the hopes that the verdict will be overturned. The men’s lawyer released a lengthy statement late Wednesday, parts of which can be viewed below. Additionally, the statement can be viewed in full over at The Telegraph.
” "With great satisfaction, we acknowledge that - for the second time - a judge of the Milan Court has reiterated once more the absolute innocence - because the allegations are untrue - of Mr Domenico Dolce and Mr Stefano Gabbana of the accusation of having unfaithfully declared their earnings (the "notorious" million dollars of Euros).

Even more so, we are satisfied about the result of this part of the verdict because, according to Italian legislation, the statute of limitations had already run out of the charge of misrepresenting income. Despite this fact, the judge felt the need to acquit them on the matter: this means that, according to the Italian law, the proof of their innocent is more than obvious.

On the other hand, as we had the chance to state during the trial, the charges were simply a paradox: the two designers were charged with not having paid taxes for an amount of money which was double of what they had actually earned. “

The statement goes on to assert the two men’s innocence over several different ideas that must have been presented in the courtroom. However, the final paragraph in the statement is one of the most telling, noting that the judge has admitted the two men have not personally ever earned close to the $500,000 potential fine the government may dish out as punishment. If that were to happen, the lawyer is alleging the government may look into how they can recoup that money via the Dolce & Gabbana company itself. This would be bad news for celebrities like Laetititia Casta and Scarlett Johansson, but a lot of things will have to happen before any sort of monetary loss will even be discussed.

”Dolce

Despite TMZ’s prison headline, the WSJ, it is actually highly unlikely that either designer will ever step foot in jail. Italian law generally dictates that a jail sentence is usually only carried out in jail in Italy if the defendant is charged with a sentence of three years or more. Since the two men received penalties under two years, it is more likely that the time will be spent under house arrest or community service. If the latter does happen, I hope the two men have some less nice clothes sitting around somewhere.

At least the two men aren't alone in dealing with tax fraud declarations from the government. Dolce and Gabbana join a long list that includes Mary J. Blige, Lindsay Lohan, and more.

Photo Credit@ Maxim Blinkov / Shutterstock.com
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