06.19.13 5:13 PM ET
Dolce & Gabbana Ruled Guilty of Tax Evasion, Sentenced to Jail Time
It looks like Domenico Dolce and Stefano Gabbana may soon be finding themselves in some un-chic surroundings. On Wednesday the famed Italian design duo was found guilty of nearly $540 million worth of tax evasion by Italy's Supreme Court and was sentenced to one year and eight month’s worth of jail time. WWD reports that the designers are expected to appeal the ruling.
Wednesday’s sentencing follows a six-month-long Supreme Court trial. Similar charges were filed in 2011 and were dismissed. The case was then appealed by Milan-based prosecutor Laura Pedio, and was heard before Italy’s highest presiding legal body. The charges stem from a 2008 investigation into the sale of Dolce & Gabbana as well as now-shuttered diffusion label D&G to Luxembourg-based holdings company Gado Srl in 2004. Italian tax prosecutors consider the sale “a legal entity used to avoid higher corporate taxes in Italy,” reports WWD.