Domenico Dolce and Stefano Gabbana, famous designers behind the fashion brand Dolce & Gabbana, have lost their appeal in an Italian court.
Reuters reports an Italian court found the designing duo guilty of tax evasion last June. According to the Associate Press, the designers reportedly owed 200 million euros ($268 million) to the Italian government and were sentenced to 20 months in prison.
Massimo Dinoia, a lawyer for Messrs. Dolce and Gabbana, told The Wall Street Journal he was "shocked" by the court's ruling and they designers will appeal the decision.
"I'm speechless," Dinoia said. "The prosecutor himself asked for them to be cleared."
Along with spending 20 months in prison, Dolce and Gabbana will have to pay a fine of 10 million euros over "avoidance of the payments in Italy," according to Reuters. Dolce and Gabbana have yet to release a statement regarding the court's ruling.
However, Dolce and Gabanna are not the only designers that have dealt with tax evasion accusations. WSJ reports fashion brands have been the target of Italy's tax authorities because fashion companies have prospered "during the country's longest recession since World War Two."
"Luxury is one of the few sectors to have done well in recent years," a source specializing in tax at Grant Thornton in Milan told WSJ. "It is easier to go and ask for money where there is money as opposed to going to a troubled sector."
According to The Hollywood Reporter, officials "valued privately-held Dolce & Gabbana at $5.3 billion in January, and estimated the net worth of the 54-year-old Dolce, who owns a 41.8 percent stake in the company, at $2.2 billion. Gabbana, 50, who controls a 40 percent stake, is worth an estimated $2.1 billion."
