MILAN — Milan-based prosecutor Laura Pedio confirmed on Monday that designers Domenico Dolce and Stefano Gabbana have been indicted on tax evasion charges.
Pedio told WWD she did not know “how long it will take” to set a date for a preliminary hearing. She declined further comment.
The designers’ legal strategy — whether they will decide to negotiate and pay a fine or opt for a lengthy trial to seek exoneration — is unclear.
If found guilty at a trial, the pair could be personally liable for more than $1 billion in unpaid taxes and fines. Dolce and Gabbana previously have denied any wrongdoing. Dolce & Gabbana Holding Srl did not comment on Monday.
The designers issued a personal statement in May 2009 denying the allegations, which relate to the 2004 sale of the Dolce & Gabbana and D&G brands to the designers’ Luxembourg-based holding company, Gado Srl. They said accusations were “based on a completely abstract calculation,” which enables the tax authorities to replace the sum actually paid with a hypothetical market value.
A Milan-based source said on Monday that “in many cases, this kind of accusation stems from the different interpretation of regulations. The state, which often doesn’t get to big-time tax evaders, tries to get to those who already pay their taxes, and ends up collecting one from the original 100 demanded.”
According to the accusations, each designer allegedly evaded taxes totaling 416 million euros, or $569 million at current exchange.
In their statement last year, Dolce and Gabbana explained they had “only actually received 360 million euros,” or $447.8 million, from the sale of the D&G and Dolce & Gabbana brands to Gado and had declared and paid everything that was owed to the fiscal authorities. They said that if the calculations of authorities were correct, their brands would have been worth 1.1 billion euros, or $1.37 billion, in 2004 — a notion at which they scoffed. There is also a separate criminal probe into supposed tax irregularities at the Dolce & Gabbana group. The accusations address unpaid taxes of 200 million euros, or $273 million.
The state fraud accusation stems from a police contention that Gado was little more than a legal entity, based in Luxembourg in the 2004-2005 period, and was allegedly used to avoid paying higher corporate taxes in Italy. The investigations were initiated by the Guardia di Finanza, an Italian police force under the authority of the national Minister of Economy and Finance. It is understood Gado’s headquarters were moved to Italy in 2007.
In the fiscal year ended March 31, revenues at Dolce & Gabbana Holding Srl fell 5 percent to 1.2 billion euros, or $1.7 billion.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews