Dolce & Gabbana eventually have to go 18 months in jail
On May 1, 2014 an Italian court upheld a guilty verdict against celebrated fashion house duo Domenico Dolce and Stefano Gabbana for evading taxes totalling EUR 200 million (around USD 277 million)
The pair was sentenced to one year and six months in prison, though under Italian law they will not face jail until the appeals process has been exhausted.
Their lawyer Massimo Dinoia stated: “I am speechless, totally stunned. We will without doubt appeal to the high court!”
Dolce & Gabbana, whose celebrity clients include Beyonce and Madonna, were accused of having transferred control of their brands to a shell company in Luxemburg in 2004-05 to avoid paying Italian taxes.
Prosecutors had argued that setting up the Luxembourg Gado company – an acronym of the surnames of the two designers – while the company was operating out of Italy was a bid to defraud the state.
They were found guilty in June 2013, and given 20-month jail sentences, which they appealed.
Dolce & Gabbana were originally accused of tax evasion of around EUR one billion, but the court ruled that just EUR 200 million, and that amount only was relevant.
The appeals court also upheld guilty verdict against other people, including Dolce’s brother Alfonso, who were given suspended jail sentences. Investigators completed a probe into the designers and five other people in 2010. The case was dismissed in April 2011, but reopened in November 2012 and went to trial.