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Italy charges Bulgari luxury jewelry heirs with tax evasion

You've got to give props to Italian tax officials for their persistence.

Last fall, Italy's highest court overturned the tax evasion convictions of fashion icons Domenico Dolce and Stefano Gabbana, whose luxe label bears their surnames.

That, however, has not deterred Italian tax collectors. Now they are going after high-end jewelers Paolo and Nicola Bulgari. The brothers, whose watches and bracelets adorn the wrists of the world's wealthy, are accused of tax evasion.

Bulgari Serpenti watch
An item from the new Bulgari, or BVLGARI in the trademarked classical Latin lettering that appears in their packaging and ads, line of Serpenti jewelry. Click image for a video of more serpent-inspired watches, bracelets, necklaces and rings.

In addition to the Bulgari siblings, their company's former chief executive officer Francesco Trapani and 10 other company executives have been indicted.

The Bulgari heirs proclaimed their innocence at a preliminary hearing on the charges this week. The judge, however, determined the prosecutors had enough of a case to warrant going to trial this fall.

The Bulgari brothers and others are charged with making fraudulent earnings declarations and evading tax payments of around 3 billion euros, or $4.08 billion. The alleged tax evasion centers on one of the jeweler's subsidiaries based in Ireland.

That location, say prosecutors, enabled Bulgari to benefit unfairly from Ireland's lower corporate tax rate between between 2006 and 2008, before LVMH Moët Hennessy Louis Vuitton acquired the Italian jeweler.

The criminal charges against the Bulgaris et al are separate from a tax (plus interest and fines) settlement of 42 million euros, or $57.2 million, made last year by the Bulgari Group.

You can bet the world will be watching come October's proceedings, not only for the tax evidence, but also to see what accessories the Bulgaris will be wearing. 

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