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MILAN — A lawyer acting for Domenico Dolce and Stefano Gabbana on Monday asked a judge here to dismiss tax evasion charges against the designers and several of their business associates.
This story first appeared in the December 4, 2012 issue of WWD. Subscribe Today.
The designers’ lawyer, Massimo Dinoia, asked judge Antonella Brambilla to overrule all the judicial documents and procedures against the designers, who are charged with omitted and unfaithful earnings declarations. Dinoia was speaking for the lawyers of the other defendants, as well.
The request was made during the first hearing of the trial in a Milan courthouse. None of the defendants attended.
Prosecutors Laura Pedio and Gaetano Ruta rejected all the objections made by Dinoia.
Brambilla will hand down a decision on Dec. 14 on Dinoia’s objections.
Among the exceptions, Dinoia cited files that were deposited tardily and “a totally revolutionary overturning of the charges,” referring to the latest charges in the case. While the accusations first hinged on fraud, now they revolve around omission of tax declaration, the lawyer contended. The designers were originally absolved of the claims by a lower court in April 2011, but the Italian Supreme Court in November overturned that decision, saying that tax avoidance, or tax mitigation, on an earnings declaration is a criminal offense under the law.
Following investigations that began in 2008, initiated by the Guardia di Finanza, an Italian police force under the authority of the national minister of economy and finance, both designers were charged with alleged tax evasion totaling 416 million euros, or $540 million at current exchange, related to the 2004 sale of the Dolce & Gabbana and D&G brands to the designers’ Luxembourg-based holding company, Gado Srl. The Italian tax police reportedly consider Gado essentially a legal entity used to avoid higher corporate taxes in Italy.
A separate criminal probe into supposed tax irregularities at the Dolce & Gabbana Group was part of the case dismissed in April. Those accusations address unpaid taxes of 200 million euros, or $258.7 million.
In a speech delivered calmly yet firmly, Dinoia said Gado was first seen as a “simulated screen,” but now the two designers were being considered the “economic beneficiaries” of that firm.
The lawyer said the accusations are unclear, citing “ineffable fogginess of the charges. We are entirely in the dark. All that has been netted has been declared.”
Ruta replied that the accusations were “modified as per the guidelines underscored by the Supreme Court” and that there was “no absolute overturning or new and additional facts.”
Following the hearing, lawyer Fabio Cagnola who, together with Giuseppe Bana, is defending the designers’ accountant Luciano Patelli, explained that if the judge grants the defendants’ requests to dismiss the case, it will return to the hands of the prosecutors to see if they want to reformulate it.
In April 2011, deeming there was no foundation for a trial, judge Simone Luerti dismissed the charges against Dolce and Gabbana and five other defendants, including Dolce’s brother and board member, Alfonso Dolce, and managing director and board member Cristiana Ruella. Milan-based prosecutor Laura Pedio appealed to the Supreme Court, which issued its ruling after about six months.