July 24, 2016  

Dolce and Gabbana Sentenced to 20 Months in Jail for Tax Evasion

June 20, 2013 (6:40 am) GMT
Domenico Dolce and Stefano Gabbana are found guilty of hiding hundreds of millions of euros from the tax authorities by allegedly transferring their firm to a holding company in Luxembourg.

Famous designer duo Domenico Dolce and Stefano Gabbana have been found guilty Wednesday, June 19 of evading taxes in their home country, Italy. They were sentenced to 20 months in prison and were ordered to pay heavy fines by a Milan court.

Dolce & Gabbana were accused of selling their company to a Luxembourg-based firm, Gado, in 2004 to avoid declaring taxes on approximately 1 billion euros ($1.3 billion). Prosecutors claimed Gado is a shell company that made no administrative or financial decisions.

The designers whose clients include and among other high-profile celebrities had initially been acquitted of tax fraud in 2011 when a judge ruled there was not enough evidence to indict them, but the highest Italian court overturned the ruling.

Prosecutors wanted Dolce & Gabbana to spend two and a half year in jail for the tax evasion, but the judge granted them only 20 months in prison. In addition, the designers were ordered to pay 500,000 euros as a first installment of a fine that could reach millions of euros.

D&G's lawyers said they were "frankly stunned" by the verdict and were "certain that it will be overturned on appeal." One of the lawyers, Massimo Dinoia, said as quoted by Reuters, "We will read the reasons for the verdict, and we will appeal."

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