Italian fashion duo convicted of tax evasion

Designers Dolce and Gabbana handed down suspended jail sentence of 18 months for hiding income from authorities.

    Given the complexity and length of the appeals process, the designers are unlikely to spend any time in jail [AFP]
    Given the complexity and length of the appeals process, the designers are unlikely to spend any time in jail [AFP]

    Italian fashion designers Domenico Dolce and Stefano Gabbana have been handed a suspended prison sentence of one year and eight months for hiding hundreds of millions of euros from the tax authorities.

    A Milan court found the pair guilty on Wednesday of failing to declare $1.3bn (euros 1 billion) in income to authorities.

    The designers, whose label Dolce&Gabbana is a Milan fashion mainstay, were not present in court and have denied the charges.

    Given the complexity and length of the appeals process, they are unlikely to spend any time in jail.

    Public prosecutor Gaetano Ruta had asked for them to serve two and a half years.

    Prosecutors had argued that the pair had evaded taxes on income of 416 million euros each and 200 million euros through a Luxembourg-based company.

    A company spokesman declined to make an immediate comment.

    The case dates back to an investigation that began in 2008, when authorities unleashed a tax avoidance crackdown as the financial crisis began to bite.

    Flamboyant designs

    Two years ago, a judge threw out a tax evasion and fraud case against the pair. Italy's high court later ruled that the designers could be prosecuted for tax evasion, though not for fraud.

    The judge on Wednesday ruled that the pair sold their brand to the Luxembourg-based holding company Gado in 2004 to avoid declaring taxes on royalties of about $1.3bn.

    The success of Dolce and Gabbana's corset dresses and sharply tailored suits favoured by celebrities like Kylie Minogue, Kate Moss and Bryan Ferry have earned them a glamorous lifestyle.

    They hosted friend and client Madonna for her birthday in 2009 at their villa perched above the chic boating resort of Portofino.

    The pair's flamboyant designs are inspired by the sultry southern Italian island of Sicily, where Dolce was born in 1958.

    He met Gabbana, now 50, in the latter's home town of Milan, where they showed their first collection in 1985.

    "Everyone knows that we haven't done anything," Gabbana tweeted in June 2012 after the trial was ordered.

    SOURCE: Agencies


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