A court in Milan has sentenced the two fashion designers behind the Dolce&Gabbana label to a suspended jail sentence for tax evasion. Prosecutors said the pair had failed to declare tax by creating a fictitious company.
In the sentencing on Wednesday, the court ordered that Domenico Dolce and Stefano Gabbana each pay a fine of 500,000 euros ($670,000) after being convicted of failing to pay tax.
The two were also given a 20-month suspended jail sentence. Prosecutors acquitted the men on charges that they had not paid tax on income of some 416 million euros each.
However, they were found guilty of failing to pay some one billon euros in tax by managing their more famous brands - D&G and Dolce&Gabbana - through the shell company "Gado," based in Luxembourg.
"Gado was an artificial construction made for the tax advantage that was obtained," prosecutor Gaetano Ruta was quoted as saying by the Italian news agency ANSA during the trial .
Both Dolce and Gabbana, whose clients include pop icons Beyonce and Madonna, as well as the model Naomi Campbell (with whom they are pictured above, Dolce on the right) had repeatedly denied the charges against them.
A tax consultant and three Dolce&Gabbana managers, Dolce's brother Alfonso being among them, also received suspended prison sentences of less than two years. A fifth company executive was acquitted.
A representative of the defendants said they would contest the court's ruling.
"We will read the motivations and we will appeal," said defense lawyer Massimo Dinoia.
Previous crackdowns on tax evasion in Italy have featured highly-publicized probes against wealthy individuals, with settlements generally being agreed out of court. Late opera singer Luciano Pavarotti in 2000 paid more than $12 million, while ex MotoGP world champion Valentino Rossi agreed to pay back $51 million dollars in 2008.
rc/dr (AFP, AP, dpa, Reuters)