Dolce and Gabbana sentenced to jail for €1bn tax evasion

Italian fashion designers Domenico Dolce and Stefano Gabbana have been sentenced to one year and eight months prison for avoiding declaring 1 billion euros from authorities.

The designers were not in attendance for their dressing down at a Milan court and have denied the charges. Additionally, given the complexity of the appeals process, they are unlikely to spend any time in jail.

The judge found them guilty on Wednesday of failing to declare 1 billion euros in income to authorities on the sale of their brand to Luxembourg-based holding company Gado in 2004.

Prosecutors successfully argued that the pair had evaded taxes on the income of 416 million euros and 200 million euros each through Gado.

The climax of the case comes after an investigation in 2008 which ensnared the fashion designers. A judge threw out a tax evasion and fraud case against the pair in 2011 but Italy’s high court ruled that the designers could be prosecuted again, just for tax evasion rather than fraud.

Dolce and Gabbana have so far not commented, although Gabbana tweeted in June 2012: “Everyone knows that we haven’t done anything”.

The designers’ dresses and suits have been favoured by celebrities like Scarlett Johannson, Kate Moss and Kyle Minogue.

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