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Berlusconi Sentenced For Tax Fraud, Remains On Trial

Kelly Phillips ErbOctober 26, 2012June 28, 2020

Che scandalo!

It feels like something out of a Hollywood movie: a once-powerful world leader in court on a series of charges including tax fraud, sex crimes, and a police cover-up, a Moroccan dancer as the victim and the hunky actor, George Clooney as a potential witness (honestly, how many times do you see the word “hunky” in a tax post?).

But it’s really happening. Former Italian Prime Minister Silvio Berlusconi was sentenced this week for his role in a tax fraud scheme. He was accused of using a series of offshore companies to buy TV rights for nearly 3,000 films and exploiting the values in order to claim the payments for tax purposes. The rights were later resold to related companies at inflated prices and the difference was pocketed. It was, according to prosecutors, a deliberate and significant case of tax evasion.

As a result of his conviction, he was sentenced by a Milan court to four years in prison, a sentence Berlusconi referred to as “a political, incredible and intolerable judgement.” He went on to say, “It is without any doubt a political verdict just as all the cases invented against me are political.”

The sentence was later reduced to one year because of prison overcrowding.

As part of his sentence, Berlusconi must pay his share of damages which totaled 10 million euros ($12,920,000 as of today). What was perhaps the biggest blow was a multi-year ban from holding public office. He has promised an appeal and will likely never serve any real jail time; if the conviction is overturned, he may also again seek office.

Berlusconi wasn’t the only defendant on trial: in total, there were eleven charged in the widespread scheme involving hundreds of millions of euros. Three other defendants were convicted alongside with Berlusconi, including Hollywood producer Frank Agrama, best known for his role in writing and producing the movie, Robotech. Three additional co-defendants were acquitted and four others were released because of a problem with the statute of limitations. The latter has been a constant problem since the trial actually began six years ago but was delayed several times, including a number of years while the Prime Minister enjoyed immunity (he served three times: 1994 to 1995, 2001 to 2006 and 2008 to 2011).

This is isn’t the first time that Berlusconi has been charged with a crime, or found guilty. He has faced a number of charges before – including prior allegations of tax fraud – and has been convicted. He has never served a day in jail largely due to the appeals process and political maneuvering. Despite all of the allegations of bad behavior, he has continued to amass wealth. He is said to be worth nearly $6 billion.

While Berlusconi appeals the sentence for tax fraud, he must sit for yet another trial that began last week on charges of soliciting sex with an underage girl. The girl, a Moroccan pole dancer named Karima el Mahroug, was later arrested for stealing and Berlusconi allegedly pressured Milan police in order to have the charges dropped. Karima, called “Ruby the Heart Stealer” was allegedly paid 7,000 euros ($9,045) for sex with the Prime Minister when she was 17 at his infamous “bunga bunga” parties, a charge that Berlusconi denies. Among witnesses that were expected to appear at trial this week in Berlusconi’s defense were Real Madrid soccer player (okay, footballer) Cristiano Ronaldo and actor George Clooney (for the record, Clooney was a no show).

As for Berlusconi, Il Cavaliere (which means “The Knight”) will likely rise again. He still enjoys a great deal of popularity among Italians and has even hinted at another run for office – assuming, of course, that he stays out of court until then.

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Kelly Phillips Erb
Kelly Phillips Erb is a tax attorney, tax writer, and podcaster.
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bunga bunga, Frank Agrama, Il Cavaliere, Italy, Karima el Mahroug, Robotech, Ruby the Heart Stealer, Silvio Berlusconi, tax evasion

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