By  on July 15, 2005

RIO DE JANEIRO — A federal police raid on designer retailer Daslu is likely to have significant impact on its business, industry observers here predicted Thursday.

Daslu — which in early June moved to a new $70 million, 200,000-square-foot Florentine-style villa — was raided Wednesday as part of a government sting operation, called "Narcissus," involving 250 agents of the federal police (Brazil's FBI) in four states, as well as 80 tax auditors. The operation was investigating Daslu's owner, Eliana Tranchesi; her brother Antonio Carlos Piva de Albuquerque; their accountant, Celso de Lima, and import firms linked to Daslu, for alleged tax evasion.

The government alleges import-export firms falsified invoices that showed that foreign merchandise, delivered by them to Daslu, cost much less than the real prices. Federal police allege that, under the scheme, Daslu paid less than the 20 to 30 percent average import taxes on fashion imports.

"Products sold at Daslu were acquired by importing firms, which underinvoiced the foreign merchandise to reduce the import tax paid on it," a federal police statement issued Wednesday said. "The underinvoicing occurred when the importer replaced a real commercial invoice with another with an inferior price. This procedure, besides reducing import taxes, also reduced [Daslu-paid] sales taxes on the items, allowing the imported product to be sold at a lower price than their real commercial value." 

The police began investigating the retailer in early 2004 when tax officials seized a container carrying Gucci shoes and discovered the merchandise and prices described on a fraudulent invoice were different from the same information on the real invoice, also found during the seizure, federal police said.

Federal prosecutor Matheus Baraldi Magnani told TV Globo Wednesday that, "Dresses that Daslu sells for 4,000 to 5,000 reals [$1,000 to $1,200] were being imported for a declared value of $10 to $15." He also told Rio de Janeiro's O Globo newspaper the tax evasion involved "millions of dollars."

Police arrested Tranchesi at her home and detained her for 12 hours to "avoid the disappearance of evidence," said Magnani. A Daslu spokeswoman said Thursday the firm "was cooperating with the federal police investigation," but refused to comment further.

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