What’s this, you say? More Italian designers into some kind of thematic BDSM? Really, as if that would even be news, much less worthy of our attention.

No, what’s cracking our monocles today here at LOLFed isn’t anything that recently came down the runway or even the fact that the D+G sample sale started today and I won’t be in New York until next week. It’s that the designers Domenico Dolce and Stefano Gabbana are being charged not just with tax evasion (which in Italy is probably met with about as much shock as the failure to pick up after one’s dog) but also with fraud:

The inquiry was begun by the Guardia di Finanza, the Italian police force specialized in fiscal crimes, which is affiliated with the finance ministry. The unit investigated the 2004 sale of the Dolce & Gabbana and D&G brands to Gado, a holding company based in Luxembourg, which was in turn owned by a company that belonged to the group headed by the designers.

Prosecutors contend that the Italian revenue service was duped out of taxes on the sale of the brands, which they claim were sold well below market value, and on the income from royalties, which were taxed in Luxembourg at a much lower rate than they would have been in Italy. The brands were sold for €360 million, or $508 million — an amount that investigators say was just under a third of their actual value, according to their own calculations. On the one hand, the Italian revenue agency is seeking to recover unpaid taxes and to impose fines. Separately, prosecutors are seeking a criminal indictment for setting up what they consider a dummy company.

This is not exactly innovative or groundbreaking territory –

1) Set up a holding company in a country with lower tax rates
2) Sell your highly taxed company to that holding company at a discount
3) Profit!

In case you’re wondering why you haven’t heard much about it, the brand has allegedly been trying to drop the hammer on coverage of the tax evasion charges by pulling or threatening to pull advertising from media outlets that dated to address the issue. (I don’t think I have any particular worries on this point, though I should make the point that I’m a size 38 in D+G clothes and 40 in shoes, if they’d like to see this post get buried.)

Domenico Dolce and Stefano Gabbana are both in China this week, and thus not available for comment, I mean, beyond Dolce proclaiming himself to be a fashion priest – and hey, would that qualify them for some kind of religious tax exemption?

(h/t: Autodidactic. I should mention we’ve gone nearly 100% reactive around here, so if there’s a story you’d like to see us cover, shoot us the link.)