The fashion world is still reeling on their two high heeled open toed sandals. Dolce and Gabana just heard that an Italian court is sending them to prison. The reason, not their overly priced in your face fashion collections, but evading the tax man for one billion euros. ($1.33 billion), according to several media outlets. They have been sentenced to one year, and eight months in prison.
Dolce, and Gabbana’s lawyers immediately said that they are going to appeal. This means under Italian law that the sentence will be suspended in the meantime. How could the duo have done this? Were they not earning enough money as is? Or were they scared that the financial crisis would also take their toll on them? Either way they decided in 2004, and 2005 to transfer control of their brands to a shell company in Luxembourg. Therefore avoiding paying Italian taxes.
Domicio Dolce, and Stefano Gabbana had created a company named Gado, an acronym for the surnames of the duo, in Luxembourg where they should have conducted their business after the change. However they continued operating their business out of Italy, and this was viewed by the prosecutors as a bid to defraud the Italian state.
According to prosecutor Laura Pedio during her closing speech there was rock-solid proof that Dolce, and Gabana had committed “sophisticated tax fraud”. Therefore they deserve to be sentenced to one year, and eight months in prison.
In 2010 there was enough evidence, according to the investigators to prosecute, however it was dismissed in April 2011. The case was reopened in November last year, and went to trial with today’s explosive result.
It is surprising to say the least that Dolce, and Gabbana surely have great accountants, and lawyers but still get into trouble. Did the duo not think, that the investigators would have a close look at their financials? Was it worth it to go to Luxembourg in order to earn even more money while risking jail time?
What does this mean for the rest of us mere mortals. Well, the first thing that sticks out is that it may not always be a good idea to put money in off shore account. (Or at least not in accounts where the tax man can have a look.) Another hard lesson is that greed doesn’t pay of in the end. The thing we are left with to ponder is, will the appeal of the D&G couple take forever or will there be swift action? Usually the rich seem to find away out of these things. It might be the case that Dolce, and Gabbana have been sentenced to prison, but does it mean they will get to see the inside? In addition will they be made to work? (One can only dream about what they will do with the prison jump suits.) It is a good example to set for other celebrities, and people with scads of money, that nowadays it is very hard to trick the system.
Would you like to see the duo going to prison? Or do you think it the Italian court have ruled too severely? It might be better for the Italians if D&G have to pay back all the money with interest, and the trial costs, but not going to prison. Because prison is expensive, and will cost the Italian citizens a lot of money. It should be about obtaining back taxes for the government coffers. It shouldn’t be about spending even more of the taxpayer’s money.
By Georgina Pijttersen