Dolce & Gabbana Under Criminal Investigation

Stefano Gabbana, left, and Domenico Dolce. Photo: Getty Images

Following allegations of tax evasions, Dolce & Gabbana is now the subject of a criminal investigation due to some financial messiness. WWD reports:

Milan-based public prosecutor Laura Pedio, who is heading up the case, told WWD on Monday the probe into alleged undeclared earnings and value-added tax was "at an early phase," but declined to give further details. The crime can carry up to a three-year prison sentence.

Italian news daily La Repubblica reported Sunday that neither Domenico Dolce nor Stefano Gabbana has so far been named in the investigation, but that their eponymous fashion group could be liable for more than 125 million euros, or $192 million at current exchange, in unpaid taxes and fines.

Last week the fashion house was ordered to pay a $3 million fine for tax evasion. But this criminal investigation is a whole other bag. It seems the company that owns Dolce & Gabbana, Luxembourg-based Gado Sarl, is a legal entity used to avoiding Italy's higher corporate taxes. Investigators are also looking into potentially shady books at the house's U.S. subsidiaries. We'd hate to see for any of this to keep the boys from continuing to bathe the world in their signature Italian excess, because we simply refuse to kiss that good-bye. Godspeed, boys.

Dolce & Gabbana Faces Tax Probe [WWD]
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