D&G charged with tax evasion

Last updated 10:08 20/06/2013
Dolce
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TAX TROUBLE: Steffano and Domenico - the men behind celeb-fave brand D&G - have been sentenced to 20 months behind bars.

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Dolce and Gabbana have been given suspended prison sentences of 20 months in jail.

The fashion house pair were ordered to do one year and eight months behind bars due to tax evasion estimated at NZ $1.2 billion, according to reports.

Legal advisors for Domenico Dolce and Stefano Gabbana insist they will appeal the decision made by an Italian court.

However for now the duo remains free as their prison time has been suspended.

The designers are thought to have transferred control of their brands to a shell company in Luxembourg to avoid paying taxes in their home country.

The sophisticated tax evasion allegedly took place in 2004 and 2005 as their fame only escalated thanks to having star clients like Madonna and Beyoncé Knowles.

The men reportedly created the Gado business abroad, an acronym of their last names, even though they were working out of Italy to trick the state system.

They were fined NZ$630,000 but it is believed they will not serve any time locked up due to the time consuming appeals process.

The trendsetters were not present in the Milan courtroom but prosecutor Laura Pedio said there was "rock-solid proof" they had committed "sophisticated tax fraud".

Fellow prosecutor Gaetano Ruta said it was "an artificial construction the aim of which was to get a tax advantage".

Investigators analysed the workings of the designers and five other people in 2010.

The case was dismissed in April 2011 however it reopened and went to trial in November 2012.

Dolce and Gabbana was founded in 1985 and has around 3,000 employees and 250 stores in 40 countries globally.

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