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Italy Hits Cavalli With Tax Evasion Charge

MILAN — Roberto Cavalli has been globe-trotting lately to celebrate various milestones and stores, but his next stop could be at a Florence courthouse.<br><br>Italy’s tax authorities have accused the flamboyant designer of tax evasion....

MILAN — Roberto Cavalli has been globe-trotting lately to celebrate various milestones and stores, but his next stop could be at a Florence courthouse.

Italy’s tax authorities have accused the flamboyant designer of tax evasion. They allege that Cavalli dodged fiscal responsibilities by booking $2.1 million to $2.6 million in charges to restructure his luxurious Tuscan home as company expenses for the fiscal years 1996 through 2000. Cavalli’s lawyer Alessandro Traversi confirmed the allegation, but a spokeswoman for Roberto Cavalli SpA declined to comment.

(Dollar figures have been converted from the lira at current euro-dollar exchange rates.)

The estate boasts two swimming pools, a collection of animal-print rugs and several centuries-old Madonna statues.

Cavalli’s lawyers defend the renovations as valid company expenses because the designer’s lifestyle is intricately linked to the success of his fashion house.

“We maintain that [the renovations of the villa] are promotional expenses for the brand,” Traversi said. “These are things you need to give a designer the right image.”

The trial, slated to kick off July 10, is set to become an all-star extravaganza. Traversi bragged that the defense has a list of some 20 celebrities — including Cindy Crawford, Sylvester Stallone and Pamela Anderson — willing to testify on the designer’s behalf.

But if the pleas of the rich and famous fall on deaf ears, Cavalli may need to rethink his wardrobe, from the famous zebra print to stripes. If convicted, the designer could face a possible sentence of 18 months to six years in the slammer.

Cavalli is not the first designer to tangle with Italian tax authorities. Tax evasion is rampant in Italy — where income tax rates can rise as high as 45 percent — and under-the-table transactions are commonplace.

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 verdict and found that they were victims of extortion.

At that time, Giorgio Armani, Gerolamo Etro and Krizia chairman Aldo Pinto were also indicted on similar charges, but pleaded guilty without testifying 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.