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Valentino, Giammetti Cited in Tax Probe

Retired couturier and partner hit with fine of $39 million for alleged tax evasion.

MILAN — Legendary designer Valentino is making headlines here once again — but not in the fashion pages. The Lazio, Italy, regional tax office has hit the designer and his longtime business partner, Giancarlo Giammetti, with a 33 million euro, or $39 million at current exchange, fine for allegedly evading tax payments. The fine was levied in relation to possible undeclared earnings.

This story first appeared in the January 15, 2009 issue of WWD.  Subscribe Today.

More seriously, the fine could lead to a criminal investigation of the two men and even a prison sentence. Case in point: Sophia Loren spent 17 days in prison in Italy in 1982 for tax evasion. In Valentino’s case, it’s unlikely he would be sent to prison given his age, which is 76. Agreeing to pay the fine would put an end to the matter if Valentino and Giammetti didn’t clear themselves of the accusations.


Whether the two men will pay up remained unclear Wednesday, however. “They are highly surprised by the position taken by the Italian authority and they will take the appropriate action accordingly,” said Ronald Feijen, managing director of Valentino’s and Giammetti’s office in London.

According to the tax office, the couturier and Giammetti avoided declaring their incomes in Italy by moving their residence outside the country, while effectively keeping their business operations here. In the last few years, similar tax probes targeted high-profile figures such as motorcycling champion Valentino Rossi and the late Luciano Pavarotti, who respectively claimed England and tax haven Monte Carlo as their official residences.

Feijen stated that the duo “moved their residence and all their interests to London more than 10 years ago, since the sale of their maison.” Valentino sold his namesake company to the now-defunct Holding di Partecipazioni Industriali in 1998. Feijen added that authorities had previously cleared the two men of any suspicion, stating that “their positions had in the past already been verified and deemed entirely legitimate and regular.”

He concluded that if this issue will be “unexpectedly and surprisingly” resumed, the designer and his partner will be, “as usual, available to supply any explanation requested.”

Valentino is not the first designer to battle Italian tax authorities. In November, Roberto Cavalli was cleared of a tax evasion indictment, after the designer was accused in 2002 of evading fiscal responsibilities by booking costs to remodel his villa on the hills surrounding Florence as company expenses for the fiscal years 1996 through 2000. Cristiana Cavalli, daughter of the designer and president of the company, told WWD at the time that they had proved “there were never fictitious activities or expenses.”

Last year, Italian authorities opened a criminal investigation into the Dolce & Gabbana fashion group following allegations of tax evasion. Questioned on Wednesday about the status of the probe, a spokeswoman said the company had no comment.

Gianfranco Ferré, Santo Versace, Mariuccia Mandelli of Krizia and their business associates were indicted in July 1995 on charges of corruption and bribing tax police in return for swift, trouble-free audits. While they were originally found guilty, a higher court overturned the verdicts and found they were victims of extortion.

At that time, Giorgio Armani, Gerolamo Etro and Krizia chairman Aldo Pinto were indicted on similar charges, but pleaded guilty in May 1996 before the trial began. They, too, said they were victims of extortion, but took plea bargains to end their cases as soon as possible. �