Former Italian Prime Minister Silvio Berlusconi’s efforts to claw out of a series of legal quagmires suffered a serious setback this week when a Milan appeals court upheld his conviction on tax fraud charges.
Berlusconi was convicted last year for his role in a tax fraud scheme involving a series of offshore companies. The companies were allegedly used to buy TV rights for thousands of films for tax purposes and later, the rights were resold to related companies. Prosecutors had referred to the scheme as a “deliberate and significant” case of tax evasion. The courts agreed, sentencing Berlusconi to four years in prison; the sentence was later reduced due to prison overcrowding. He was also required to pay a fine of 10 million euros (US $12,970,993) and was banned from holding public office for a number of years.
This latest court decision reinstated Berlusconi’s prison sentence to four years and his ban from public office to five years. Realistically, no one expects to see Berlusconi serve jail time for this conviction (his solicitation charges are another story). It is, however, widely known that Berlusconi is once again eyeing public office.
Despite his conviction, which he described as “without any doubt a political verdict just as all the cases invented against me are political,” Berlusconi remains widely popular in Italy. He also has enormous resources: Forbes has included him at #169 in the 2012 world’s billionaire list, estimating his wealth to be $6.2 billion. Both of those factors could help land him back in public office – if he can overturn his conviction and stay out of court. The latter might be more difficult than originally contemplated: just yesterday, Italian prosecutors accused Berlusconi of bribing a senator to switch parties. The payment was allegedly made in 2006 to Sergio De Gregorio, a formerly left-wing senator from Naples, to flip to Berlusconi’s more conservative People of Freedom party. De Gregorio has admitted taking the money and has also been charged in the scandal.
At the same time, Berlusconi must wait for the verdict in a sex crime case that has riveted much of Europe. In 2012, he was charged with soliciting sex with an underage girl. The girl, a Moroccan pole dancer nicknamed “Ruby the Heart Stealer” – her real name is Karima el Mahroug – was allegedly paid 7,000 euros (US $9,081) for sex with the former Prime Minister at his infamous “bunga bunga” parties. After the encounter, Karima was accused of theft (of jewelry, not hearts) and prosecutors allege that Berlusconi attempted to use his position to pressure police to drop those charges. Berlusconi testified that he did make a phone call on her behalf but says that it was a personal favor to former Egyptian President Hosni Mubarak and not an attempt to abuse his position. If convicted, Berlusconi faces up to three years in jail on the solicitation charge and six to 12 years in jail for the abuse of power charge.
As for his tax case, Berlusconi has one chance at appeal remaining. He is expected to appeal the decision shortly to Italy’s Corte Suprema di Cassazione, also called the Court of Cassation or Court of Last Resort. The statute of limitations for his case will expire in July.

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Kelly Erb is a tax attorney and tax writer.

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