As expected, design partners Domenico Dolce and Stefano Gabbana have been indicted on tax-evasion charges. The prosecutor tells WWD she is unsure when the preliminary hearing will occur. It's unclear if the label will opt to pay a fine and negotiate or try to get out of the charges altogether by undergoing what could be a lengthy trial, which could result in a fine of $1 billion. The designers have denied any wrongdoing as prosecutors take issue with the holding company the label set up in Luxembourg.
A Milan-based source said on Monday that “in many cases, this kind of accusation stems from the different interpretation of regulations. The state, which often doesn’t get to big-time tax evaders, tries to get to those who already pay their taxes, and ends up collecting one from the original 100 demanded.”
Dolce and Gabbana are accused of skipping out on $569 million each.