Prisoners of Cell Block D&G
Crime does not pay...or for Dolce and Gabbana, il crimine non paga.
Italian Fashion Designers Domenico Dolce and Stefano Gabbana, whose clients include model Naomi Campbell, singing sensations Madonna and Beyoncé and actresses from Scarlett Johansson to Angelina Jolie, were found guilty on Wednesday 19th June of evading around €400 million euros worth of tax (£342 million pounds) on a one billion euro business deal. The two designers apparently evaded this substantial amount of tax during the sale of their D&G and Dolce & Gabbana brands to a 'shell' company named 'Gado' in Luxembourg in 2004.
Prosecutors said the sale of the brands to Gado, an acronym of the designers' surnames, was the
holding company that the fashion duo set up themselves, which enabled them to sell these top end brands whilst avoiding a
high rate of tax in Italy and pay a lower rate in Luxembourg, thus defrauding the Italian state in an active criminal act.
One prosecutor, Laura Pedio, told the court in Milan that there was "rock-solid" evidence that Dolce and Gabbana had engaged in a "sophisticated tax fraud" and had "participated actively" in the tax evasion, "signing the contracts for the sale of the brands."
Prosecutors had called for both of the designers to be sentenced to two-and-a-half
years in jail however this sentence has been suspended by the judge in the case, Antonella Brambilla, however he has ordered the
designers to pay €500,000 euros each in damages. Representation for the duo believe in the innocence of the designers and plan to lodge an appeal against the ruling of the court, with the designers themselves vehemently denying all charges.
Originally the partners were cleared of any allegations in 2011 by a court since investigations into the tax fraud apparently began in 2007 however Italy's
highest court have since overturned that acquittal and ordered that the case be
sent back to trial since the government are trying to crack down on tax avoidancy and clearly felt there was something substantial going on. As is customary under Italian law, the pair will remain at liberty pending the appeals process by their defence and they will have further levels of
appeal before they are forced to actually spend any prison time.
The couple have had huge success in the fashion industry and are held in high regard alongside
the other key players of Italy and the world's fashion industry
alongside Armani, Versace and Valentino, however this will come as a
huge blow to the industry and the brands themselves, joining the likes of late Opera singer Luciano Pavarotti and ex MotoGP world champion Valentino Rossi in the Italien tax evasion Hall of Fame.