FOUNDERS OF FASHION GIANT DOLCE & GABBANA SENTENCED TO 18 MONTHS IN JAIL FOR TAX FRAUD IN ITALY

DOMENICO DOLCE & STEFANO GABBANA

An Italian appeals court on Wednesday upheld a tax fraud conviction for
Domenico Dolce and Stefano Gabbana, the founders of the world-famous fashion label Dolce & Gabbana, sentencing them to a suspended 18-month jail term.

The designers stood accused of failing to pay tax on income of $277 million by creating fictitious companies in Luxembourg in order to dodge heftier corporate tax rates in their home country.

In a first instance ruling in June, each was sentenced to 20 months’ imprisonment. On appeal, the prosecution asked the court to drop the charges and acquit them, but Milan judges ignored the advice and confirmed the guilty verdicts, with a slight reduction in the jail term.

The court also upheld a fine of about $690,000 euros, and sentenced four other defendants — three Dolce & Gabbana managers, including Dolce’s brother Alfonso, and a tax consultant — to suspended prison terms ranging from 14 to 18 months.

“I am speechless. I am flabbergasted. We will definitely appeal,” said Massimo Dinoia, a lawyer for the designers. In Italy, rulings can be challenged twice before they are final.

The tax case against Dolce & Gabbana started in 2008. At the end of a civil lawsuit in 2013, the company’s founders were fined $475 million. But criminal proceedings remained open against them, leading to Wednesday’s convictions.