Matteo Marzotto

MILAN — Matteo Marzotto’s long-running legal woes have come to an end, but the entrepreneur continues to fight back to prove his innocence.

The tax evasion charges filed against Marzotto have been dismissed under the statute of limitations, but he has turned to the European Court of Human Rights asking to help set the record straight.

Marzotto can breathe a sigh of relief because he has no criminal record to speak of, but the statute of limitations, which expired after seven years and six months at the end of June 2016, means the case could not unfurl at the appeal level. The Court of Appeals deposited its verdict on Sept. 15, stating no further legal action was to be pursued against Marzotto, his sister Diamante and real estate entrepreneur and broker Massimo Caputi, all of whom were indicted.

“The end of this sequence of events, although positive from a strictly legal point of view, leaves me with a sour taste in my mouth. Firstly, because over all these years I had to dedicate a lot of energies to my defense, distracting them from other activities, without producing any results in the end because the trial all came to nothing,” Marzotto told WWD. The trial, he continued, did not reach the “conclusion that was, after all, apparent to anyone — that tax evasion does not belong to my way of life and way of thinking and that there was not one single document or witness that could contradict me.”

Marzotto feels wronged and had never negotiated a plea bargain, claiming his innocence throughout the investigations and the trial, which ended in February 2016. He was found guilty of tax evasion by a Milan courthouse headed by Judge Orsola de Cristofaro, but Marzotto’s lawyers appealed the verdict.

“We asked for an acquittal because there was no case to answer,” said lawyer Alessandra Mereu. “It’s a pity that the statute of limitations prevents us from assessing Marzotto’s personal position,” said Mereu’s colleague Paolo De Capitani. Marzotto “saw himself as an investor, but on a personal level there was not one signature on the papers” related to the alleged evasion, continued De Capitani.

The allegations involve the Marzotto family’s association with the sale of Valentino Fashion Group to private equity fund Permira in May 2007 for more than 782 million euros. According to the indictment, taxes on the profit derived from the transaction were never paid in Italy. Core to the trial was International Capital Growth, a firm the tax police believe to be a fictitious entity based in Luxembourg and managed in Milan, and allegedly created for the purpose of selling 29.9 percent of VFG. Caputi was the broker for ICG.

Mereu and De Capitani said the European Court of Human Rights is expected to issue its own verdict on Marzotto’s case in either 2018 or 2019. The papers were filed in 2013 and De Capitani said a response usually takes around five years. Marzotto and his sister Diamante have paid a fine of more than one million euros each, said De Capitani, but this does not rule out a trial because in Italy fiscal and penal trials are independent. In previous cases at the European level, he explained, Italy was condemned for initiating a trial once the financial issues had been settled. The multiple implications in such a case even include a change of legislation in Italy.

In February last year, the Marzotto siblings and Caputi were sentenced to 10 months and the payment of the expenses for the trial, but the judge suspended the punishment because of extenuating circumstances — the fact that the Marzottos have no criminal record and that they paid their fiscal debt. The judge also ordered Marzotto properties that had been sequestered to be returned to their owners.

The charges, as well as the verdict, did not emphasize the position of each investor, Marzotto said. The group of investors in ICG was large and each had a “very, really very different” position and opinion regarding the investment, he contended. “And this is valid not only for me but also for my sister Diamante, who to this day is trying to understand why she has been drawn into this, not only from an administrative point of view — as an investor, this could also be understood — but especially penally because the individual position, I repeat, was not at the time duly appreciated.” Throughout the trial, several witnesses underscored Diamante Marzotto’s distance from the business.

Secondly, Marzotto noted that the issue has also left this “sour taste” because it had disrupted “the relations with other members of my large family, they have never been the same, and only time will tell if they will ever be mended.”

In April 2013, Milan’s prosecutors’ office notified 13 individuals of the Marzotto Group, including members of the Marzotto family and administrators of the company, for alleged omission of earnings declaration and tax evasion of more than 71 million euros. Among the individuals notified at the time, in addition to Matteo and Diamante Marzotto, were Vittorio, Margherita, Maria Rosaria and Cristiana Marzotto and Andrea, Isabella and Rosanna Donà Dalle Rose. All those charged have denied the accusations. The group in May that year — including Matteo Marzotto — paid a sum of around 56 million euros to the Agenzia delle Entrate, Italy’s internal revenue service.

According to the allegations, ICG allowed the accused to net a capital gain of 200 million euros, and elude the payment of more than 71 million euros in tax, the police claimed.

“Certainly, my mistake was to delegate too much of the financial management of the investment in Valentino, but I trusted [too much] and I was totally dedicated to and enthusiastic about the industrial part of the business. Ten years later, Valentino’s value and potential has been confirmed and it has emerged, unfortunately in the hands of other and more farsighted investors,” remarked Marzotto, who was chairman of the Rome-based house. Permira sold Valentino to the Qatar-based fund Mayhoola, formerly Mayhoola for Investments, in 2012.

Throughout the trial, Marzotto’s lawyers and the witnesses they summoned repeated the defendant’s unwillingness to sell the Valentino brand in an attempt to underscore how removed he was from any tax evasion plan.

“Nevertheless, I am still proud to have participated with the team of managers back then to the revamp of a great fashion house, without forgetting that when we bought it, it was posting heavy losses and few believed in its relaunch. This chapter closed, I am in any case pleased to be able to once again dedicate all my energies to my future entrepreneurial projects,” he said.

After Valentino, Marzotto invested in Vionnet with former Marni chief executive officer and longtime friend Gianni Castiglioni. When Goga Ashkenazi took full control of that brand, Marzotto went on to hold a position as president of Enit, Italy’s national agency for tourism. He is now vice president of Italian Exhibition Group, which organizes a range of trade shows, including jewelry fair Vicenzaoro, and is an investor in and president of Italian fashion brand Dondup.

The defendants, indicted for alleged omission of earnings declaration and tax evasion, never attended the trial in court.

At the time of the verdict, in a statement, Marzotto said: “We were always convinced that the accusations were unfounded and this clearly emerged during the hearings: all the paperwork and all the witnesses, called by the prosecutor as well as by our lawyers, always confirmed that we were entirely uninvolved in the facts. For this reason, the Milan courthouse verdict surprises us and we have trouble understanding how two minority shareholders who never took part in the management of the company can be considered guilty of a crime that could have been potentially committed by the administrators.”

After two earlier delays in 2014, the trial got underway in November 2014.

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