14 DAY TRIAL // The fashion power couple Domenico Dolce and Stefano Gabbana, who have together founded the famous brand Dolce & Gabbana have both received a suspended 18-months in jail sentence, given to them by Italian authorities yesterday.
The designers were accused by Italian prosecutors that they hid millions of euros from their revenue from local tax authorities and thus caused an important prejudice to the country's income. Both Dolce and Gabbana are famous for their luxury fashion brand that often ends up on red carpets, being worn be the most notorious celebrities.
But no amount of celebrity could help them in the trial that saw Italy's appeal court uphold the previous verdict issued last June against the pair. Dolce & Gabbana were accused of using the Luxembourg holding company called Gado in 2004 to avoid paying taxes on royalties of 1 billion euro ($1.38 billion), according to E! Online.
Many have seen the case as a crackdown of Italian authorities to fight tax evasion which is said to be escalating and causing major damages to the country's already weakened economy by the financial crisis in the euro zone. Many luxury brands have been targeted in the past years and this trial is the latest in a long line of tax evasion warfare.
Another man convicted in the case was Luciano Patellito, an accountant for the fashion label. He has received a suspended sentence of one year and six months in prison.
The only victory the designers got was a reduction of sentence from 20 months in jail to 18 months because of certain statute limitations being applied to certain facts in the case.
Needless to say, Dolce & Gabbana's legal team are outraged at the outcome and have promised to appeal the decision as soon as possible. “I am speechless. We are all shocked. The judgment is inexplicable and we will appeal,” said Massimo Dinoia, a lawyer for the fashion moguls.
Apart from the jail sentence, the court ruling also specifies that the high fashion designers also have to pay a fine of up to ten million euros for trying to evade taxes in Italy, a country which is known to have one of the highest systems of taxation in Europe.
Other fashion houses have also been affected by this crackdown, but have managed to avoid going to court by paying very large sums of money, often going in hundreds of millions of euros. This includes famous brands the likes of Armani and Prada.