Courtroom Drama:Dolce And Gabbana Indicted

DESIGNERS Dolce and Gabbana look set to be indicted for alleged tax fraud today.The designers, who were accused of setting up a holdings company in Luxembourg in order to evade high Italian taxes, may now have to face a court trial.

The options facing the designers are that either the judge will find the evidence against them insufficient and dismiss the case, or the designers may settle out of court and pay a fine, or they may have a shortened trial with fewer witnesses and documents.Failing those options a full-scale trial, which could last several years, could result in the designers, if found guilty, being personally liable for more than $1 billion in unpaid taxes and fines and sentenced to up to three years in prison.

"It's a paradox!Since when does one have to pay taxes on money one never actually collected," the designers said in a personal statement in 2009."It's an absurd demand based on a completely abstract calculation.This higher taxable sum is a virtual figure we have never received, the result of a theoretical accounting exercise."

Designer brands including Salvatore Ferragamo, Gianfranco Ferré, Roberto Cavalli, Versace, Krizia and Etro have experienced similar tax-related wranglings in Italy in the past, WWD reports.

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