Legally Yours. Dolce and Gabbana Accused of Tax Evasion

November 22, 2010 • Fashion

Domenico Dolce and Stefano Gabbana

It seems there's trouble brewing in the fashion capital of Milan. Italian authorities have reportedly indicted legendary designers Stefano Gabbana and Domenico Dolce for alleged tax evasion and abuse of rights relating to the 2004 sale of the Dolce & Gabbana and D&G brands to the designers’ Luxembourg-based holding company Gado Srl.

The case first made headlines in 2008, though little progress has been made since then. Now Dolce and Gabbana face a potential a court trial, which could result in the designers being personally liable for more than $1 billion in unpaid taxes and fines. According to WWD, the fate of the designers now rest on the shoulders of their lawyers and of the judge who will preside over preliminary hearings. The latter will evaluate the evidence provided by Milan-based prosecutor Laura Pedio and has the option to dismiss the case if the evidence doesn’t justify moving forward.

If the judge decides to proceed, there are three possible options: Dolce and Gabbana’s lawyers may decide to negotiate and pay a fine to avoid a drawn-out and expensive court trial. If that were the case, their criminal record would remain clear. However, as the designers have already claimed not guilty, they may not be willing to take that route, and an ordinary trial would take place, potentially spanning over the next several years. And thirdly, a shortened trial is possible, based on a reduced number of documents and witnesses in the case. If chosen, this option would result in a penalty discounted by one third.

If found guilty on all charges, the designers’ could face up to a three-year prison sentence or a fine up to $1.3 million.

Article Source: WWD

Photo Source:

-Alia Rajput

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