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Dolce and Gabbana found guilty of tax evasion

The two designers lost the appeal against their conviction and have been hit with a suspended 18-month jail term

It's official: Domenico Dolce and Stefano Gabbana are guilty of tax evasion, with a Milan court setencing the pair to a suspended 18-month prison term.

The two designers behind Dolce & Gabbana lost their appeal in a Milan court today. After hours of deliberation, a three-judge court ruled to uphold last June's guilty verdict. The only concession of the law? Slashing the pair's original 20-month jail term by two months.

The two designers failed to file tax declarations for a Luxembourg-based company called Gado. Prosectors argued that the pair created the company with the sole purpose of evading Italian taxes, alleging that setting up Gado enabled them to evade €40 million of taxes in 2004 and 2005.

Massimo Dinoia, a lawyer for Dolce and Gabbana, told the Wall Street Journal that the pair are "shocked" by the ruling. The designers have claimed innocence throughout the entire trial and are now planning to lodge another appeal.