12/03/2012 08:34 am ET

Dolce & Gabbana Tax Evasion Trial Begins


They can wish and pray that it will go away. They can even "pretend it doesn't exist," but Domenico Dolce and Stefano Gabbana will have to face the realities of their tax evasion allegations head on today as court proceedings begin.

In case you missed it, Dolce & Gabbana has been in hot water for the past few years over an alleged €400 million in taxes that they owe after selling their D&G and Dolce & Gabbana brands to Gado, a holding company in Luxembourg, in 2004. Somehow the fact that this new setup enabled the two to each avoid paying their share of taxes skipped their minds, according to prosecutors.

"They are each accused of evading around €200 million in tax so that's €400 million altogether. We'll be establishing the initial timetable for the trial. Six other people are involved, including their tax consultant," Laura Pedio, a prosecutor in the case, told The Sunday Telegraph.

Of course this isn't the design duo's first time at the tax evasion rodeo. Dolce & Gabbana were initially investigated for that charge as well as fraud back in 2007, but the case was dismissed in April 2011. That decision was overturned though, and the Italian Supreme Court began looking into the details of the case -- including the fact that Dolce & Gabbana's companies were sold to Gabo for €360 million each, a mere fraction of their €1.2 billion value, which was an attempt to further evade taxes, the prosecutors are charging.

Despite their A-list client roster (Scarlett Johansson, Matthew McConaughey, Beyonce...), if guilty, Domenico and Stefano could face up to five years in prison. Not to mention, the start of this legal battle comes just on the heels of the controversy the brand sparked with their so-called "slave-like" black figurine earrings shown on the Spring 2013 runways. This definitely hasn't been their season...

This is only day one of the trial though, so stay tuned for updates. What do you think of Dolce & Gabbana's legal troubles?

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