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MILAN — A verdict in the tax trial of Domenico Dolce, Stefano Gabbana and five others is expected Wednesday after the prosecutors and defense make any final statements.
This story first appeared in the June 17, 2013 issue of WWD. Subscribe Today.
On Friday, the designers’ accountant, Luciano Patelli, one of the defendants, exercised his right to offer a statement as his lawyers asked the court for his full acquittal. After citing his experience of more than 30 years as a consultant with high-profile firms and publicly listed conglomerates and his lessons on fiscal law at the Academy of Italy’s police force Guardia di Finanza, Patelli lamented how prosecutor Gaetano Ruta “tried to discredit” him despite his continuous “full respect of the laws” by accusing him of slashing Dolce & Gabbana’s fiscal costs.
“This is a legitimate and natural activity, any company looks at containing costs, also those related to taxes,” said Patelli, reading his statement firmly and in an even manner.
In his closing speech last month, Ruta had the harshest words for Patelli, who he viewed as the “orchestrator” of the issues at trial, asking Judge Antonella Brambilla to sentence Patelli to three years in prison for tax evasion, more than the two-and-a-half years requested for Dolce and Gabbana. Ruta alleged in his statement that the only purpose in selling the Dolce & Gabbana brands to the Luxembourg-based Gado Srl was to avoid paying taxes.
“Our duty is to determine the borders for actions within the law and I am convinced this was always top of mind, as this is my usual method, transparent and everything in writing. I feel the words of the prosecutor were deeply unjust as I was defined an instigator to the crime, but this is not so. The necessity to save on tax payments after the restructuring of the company was outlined to me from the beginning , and it’s natural and normal,” said Patelli, adding that letters from Dolce & Gabbana to the Revenue Agency requesting clarifications on how to proceed in terms of tax rates were shown to him from the start and dated back to 2002. Patelli said that Ruta’s “suggestion” that Dolce & Gabbana’s tax rate went from 45 percent to 4 percent with Gado was “erroneous,” setting it at 32 percent, noting that there was no “sensational” saving.
Patelli concluded by saying that he was never aware of how Gado operated, as his task ended with the restructuring of the company. The latter had become essential in the expansion of the company as the designers physically owned the Dolce & Gabbana and D&G brands, a fact that presented elements of risk. For this reason, claim the defendants, the brands were sold to the Luxembourg-based company.
Patelli’s lawyer Fabio Cagnola said he did not wish to be polemic with Ruta “although he has made every effort for me to be so,” and praised the “ transparency of Patelli’s work. Every single step can be traced back, which proves how legitimate the project was, he hid nothing. This is a trial full of prejudices. The prosecutor built his accusations around a prejudice — that if you set up a company outside Italy, it is a fictitious one.”
Cagnola contested this, claiming that crime exists only if there is “a dissociation between the formal and the actual residences.” Just as the designers’ lawyers had said earlier in the week, Cagnola reiterated that the European Union allows and protects “free fiscal competition” among the countries. The lawyer underscored that Patelli alerted Dolce & Gabbana’s management that Gado activities should take place in Luxembourg.
Patelli’s other lawyer, Giuseppe Bana, said the accountant “instigated to follow the law.” He noted how neither Dolce & Gabbana nor Patelli, an “esteemed professional whose reputation was indubitable” could run the risk of breaking the law. Going back to a remark made by Ruta in an earlier hearing, expressing surprise that there had been no discord between Patelli and the other defendants after their indictment, Bana said: “Why should it have been any different? Everything was legitimate and above board.”