Robert J. Fedor, Esq., L.L.C.

Fashion duo charged with tax evasion face hefty fines

Nearly 30 years ago two friends who shared a dream and vision decided to form a partnership. Together Stefano Gabbana and Domenico Dolce founded and grew the fashion empire known as Dolce & Gabbana. While the fashion duo has enjoyed a tremendous amount of success, with Hollywood elite and royalty often donning their label, today the two Italian citizens may soon find themselves behind bars.

An Italian judge recently announced that both Gabbana and Dolce were guilty of criminal charges related to tax evasion. They have been ordered to pay fines in excess of $439 million and face up to five years in prison for their alleged crimes.

The criminal charges stem from a 2004 business deal in which the fashion duo sold their business to another business entity which they control. At the time of the business deal, they faced scrutiny for allegedly undervaluing their business in an effort to avoid paying higher taxes on the transaction.

Supporters of Dolce & Gabbana question the Italian court's motives and have urged the two to appeal the decision. An appeal would allow the two to delay paying any fines and as well as avoid sentencing related to potential jail time.

It's not only the rich and famous who face criminal charges such as tax evasion. Many Ohio residents also face increased scrutiny and potential criminal action by the Internal Revenue Service. As the deadline to file both personal and business-related income tax returns nears, Ohio residents who have tax-related questions or concerns would be wise to consult with a tax attorney. Taking the appropriate action now can help avoid future tax problems and potential criminal charges.

Source: Forbes, "Dolce & Gabbana Fined For Tax Evasion," Kelly Phillips Erb, April 3, 2013

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