Dolce and Gabbana have been found guilty of tax evasion by an Italian appeals court according to the Hollywood Reporter. Designers Domenico Dolce and Stefano Gabbana and their accountant Luciano Patellito have been sentenced to one year and eight months in jail. The court upheld a conviction which was handed down last June for the designers' allegedly avoiding taxes on approximately €1 billion in the process of their 2004 sale of their brands to Luxembourg holding company Gado. The 2013 lower-court ruling gave Dolce and Gabbana suspended 20-month jail sentences and fines of up to €10 million; the jail sentences have been reduced to 18 months. However, under Italian law, Dolce and Gabbana will not actually have to serve jail time as the sentence is below Italy's minimum 3 year sentencing requirements. Sentences of less than three years are usually served in the form of house arrest or community service in Italy, according to the Wall Street Journal.

Neither designer appeared at the hearing, and both have declared their innocence. The designers said they would appeal the decision according to the Daily Mail. Lawyer Massimo Dinoia stated, "I am speechless. We are all shocked. The judgement is inexplicable and we will appeal. The prosecutor himself asked for them to be cleared."

Bloomberg valued privately-held Dolce & Gabbana at $5.3 billion in January, and estimated the net worth of the 54-year-old Dolce, who owns a 41.8 percent stake in the company, at $2.2 billion. Gabbana holds a 40 percent stake and is worth an estimated $2.1 billion.

Italy has seen its share of tax evasion from high end fashion brands. Giorgio Armani recently paid 270 million euros to tax authorities according to Forbes. The amount was settled over a dispute regarding the group's foreign subsidiaries. Prada Holding reportedly paid an even larger amount, between 400-420 million euros, to settle a tax dispute.