Former Valentino Chairman, Matteo Marzotto, has been sentenced to serve 10 months in prison for tax evasion. The judges of the Second Criminal Chamber of the Court of Milan found Marzotto; his sister, Diamante Marzotto; and Massimo Caputi, managing partner of International Capital Growth company, guilty of tax evasion in connection with the the sale of the Valentino Fashion Group brand in 2012. The siblings were accused of failing to report their income from the sale of the Italian design house, which amounts to roughly 70 million euros (nearly $78 million).
It seems the defendants have been served something of a lenient ruling. In addition to only receiving sentences of 10 months each, less than the 1 year and four months sentences suggested by Prosecutor Gaetano Ruta, the court held that the sentences will be “suspended” and no mention of the sentencing process will be included on the individuals’ criminal records. As you may know (from the D&G case), most criminals in Italy are not required to serve prison terms of under two years. Additionally, the judge of the Second Criminal Chamber of Milan has ordered the release and return of any additional monetary sums, which had been seized from the defendants.
As is protocol in Italian tax proceedings, the reasons supporting Judge Orsola De Cristofaro's guilty verdict will be filed within 90 days with the Second Criminal Chamber of Milan.
Speaking about the ruling, Marzotto’s lawyers, Paolo De Captains and Alessandra Mereu, stated: "It is not the first time that the innocent are convicted at first instance and then acquitted by a final judgment.” They are likely referring, at least in part, to the tax evasion proceedings of Dolce and Gabbana founders Domenico Dolce and Stefano Gabbana, who were acquitted in 2014, when Italy's high court overturned two lower courts' rulings (including both judges' strongly-worded opinions as two why the designers are, in fact, guilty), which held the Italian designers were guilty of hiding hundreds of millions of euros from Italian tax authorities. Specifically, the lower courts held that Dolce and Gabbana, as well as other company execs, used Luxembourg holding company Gado to avoid paying taxes on royalties of about 1 billion euros ($1.38 billion).
According to the defendants' legal teams, they will appeal the recent guilty ruling.