Everyone from Roberto Cavalli to Versace has faced tax-related allegations in the past. As of late, it’s the Dolce & Gabbana boys, Domenico Dolce and Stefano Gabbana, that have been the center of an unwelcomed scandal.
Accused of creating a company in Luxembourg between 2004 and 2005 through which they allegedly funneled sales and royalties to avoid Italy’s higher tax rates, it was reported last month that the tax evasion charges had been dropped with no formal charges filed. This was particularly surprising given that there was over $1 billion in question. Throughout the investigation, which began in 2008, the design power duo claimed that they paid all due taxes and that they “wished” their company drew in the sums alleged by Italian authorities. Now, despite the case having been dropped just a few weeks ago, the designers have been indicted for possible tax evasion and will face a court trial.
It is being reported by WWD that in the best case scenario for Dolce and Gabbana, the judge will find the evidence against them insufficient to proceed with the case. If that does not happen, the duo may opt to either settle out of court and pay a fine to avoid a pricey, long trial and possibly even more public embarrassment, or, they may have a shorter trial with fewer documents and witnesses (this would result in a penalty). In the event that neither of those options pan out, a full-scale trial will take place. If found guilty, the fashion influencers could face a three-year prison sentence and be held personally liable for more than $1 billion in unpaid taxes along with fines.