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Dolce and Gabbana convicted of tax evasion

The famous designers were sentenced to a suspended 20-month sentence and a substantial fine.

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Antonio Calanni/AP
In this file photo taken in January 2013, Italian fashion designers Stefano Gabbana, left, and Domenico Dolce bow to the audience after presenting their Dolce & Gabbana men's Fall-Winter 2013-14 collection in Milan, Italy.

High-profile fashion designers Domenico Dolce and Stefano Gabbana were convicted of evading some hundreds of millions of euros in Italian taxes on Wednesday, receiving a 20-month suspended prison sentence and a fine of 10 million euros.

The designers, who have denied the charges throughout the saga, plan to appeal the conviction.

The case dates back to 2004, when the designer duo sold the Dolce and Gabbana brand to Luxembourg-based holding company Gado, allegedly to skirt taxes of some 1 billion euros of royalties (or $1.3 billion). The severest penalty available to the Italian court in the case was a five-year sentence; Public prosecutor Gaetano Ruta had asked the court for a two-and-a-half year prison term, Reuters reported.

In the hours after the conviction, Mr. Gabbana tweeted a picture of a Dolce and Gabbana party invitation – prefaced with hearts and an miniature Italian flag – and a video of the brand’s newest collection.

Mr. Gabbana and Mr. Dolce debuted their first women’s collection in 1985 in Milan, before expanding to the US to become a brand recognizable worldwide as beacon of wealth and decadent, often outlandish style – in their Fall 2013 collection, model Kate King walked down the runway bearing a crown and a gold-colored, bejeweled gown that could have graced the body of an unusually fashion-forward medieval monarch. The brand has also made a name for itself in Dalmatian and cheetah prints, tight, corseted dresses that bloom with big flowers, and models that evoke something of "La Dolce Vita." 

How the European wealthy handle their money has been an increasingly hot-button issue since French actor Gerard Depardieu renounced his French citizenship and took up residence in Russia to avoid high taxes there. Reuters reports that tax evasion cases have been on the upswing in Italy since 2008, when officials there sought to stem a financial crisis with more rigorous attention to the issue.

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