A Milan court convicted the designers Domenico Dolce and Stefano Gabbana of tax evasion, according to reports.
The Associated Press reported that the duo was found guilty of failing to declare 200 million euros ($268 million) through a Luxembourg company to authorities and given a one year and eight months suspended jail sentence.
Dolce and Gabbana denied the charges. The high-fashion designers were ordered to pay a penalty of 500,000 euros (about $670,000) to tax authorities.
"Defense lawyer Massimo Dinoia pledged to appeal the ruling, saying the fact the court issued an acquittal on a charge that had expired, instead of just letting it fall to the statute of limitations," the Associated Press reported.
Dolce and Gabbana join an increasing number of wealthy Italians in hot water over their financial transactions, including Roberto Cavalli, Valentino and former Italian Prime Minister Silvio Berlusconi, according to Forbes.
Two years ago, a judge reportedly threw out a tax evasion and fraud case against the designers.
The success of Dolce and Gabbana can be attributed to their corset dresses and sharply tailored suits as seen on celebrities like Katy Perry, Kylie Minogue and Justin Timberlake. Their brand has become synonymous with a glamorous lifestyle.
In 2009, the design duo reportedly hosted, friend and client, Madonna's birthday in at their villa on a upscale boating resort of Portofino.
Dolce and Gabbana's designs are inspired by the southern Italian island of Sicily, where Dolce was born in 1958.
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."
Dolce and Gabbana have not released a statement about the court verdict.
