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Italy’s Berlusconi Loses Appeal in Tax Fraud Case – Appeals Some More

June 24, 2013

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ormer Prime Minister Silvio Berlusconi cannot seem to get out of the news. Part of it might have to do with the fact that he owns a controlling share in Italy’s Mediaset, the largest media company in the country. The rest might have to do with the alleged tax fraud he’s been convicted of regarding Mediaset. In another blow to his attempts to shake off this reputation-buster, Italy’s Constitutional Court ruled that the lower court’s decision to continue with a hearing that the then-prime minister didn’t attend was proper.

Mediaset, prosecutors allege, bought the rights to U.S. film and television properties at highly inflated prices so as to fraudulently lower taxes owed. As Berlusconi is the controlling shareholder of the company, he is directly implicated. The case has been frustrating the former prime minister from the days when he was still in office.

Mr. Berlusconi left the role of head of government in late 2011, but has since returned to politics by being elected to the Senate. If the conviction were ultimately upheld, Berlusconi would face a three-year ban from any corporate position in Italy and, more damning, a five-year ban on holding public office. The repercussions of this would reach further than just Berlusconi; the governing coalition of the Italian government may fall apart. If he is removed, his party’s support may falter and cause a crisis for a coalition that has only been in power for about two months. Given Berlusconi’s ability to resurrect from political purgatory before, it’s likely he will find a way out of this current conundrum before long.

Offshore Accounts/International Tax Disputes