Italy's Berlusconi in tax fraud scheme as PM, judges say

Reuters News
Posted: May 23, 2013 1:11 PM
Italy's Berlusconi in tax fraud scheme as PM, judges say

MILAN (Reuters) - Former Italian Prime Minister Silvio Berlusconi was involved in a tax fraud scheme while he was head of government, a Milan court said in a document released on Thursday explaining its earlier decision to uphold his four-year conviction.

Berlusconi's mounting legal difficulties have created tension in Italy's fragile coalition government, over which he has veto power, and the tax fraud case is nearing its final appeal with a definitive judgment possible within a year.

On May 8 the appeal court upheld the sentence for tax fraud in connection with the media mogul's television network Mediaset. In the Italian judicial system, courts publish the reasons for their rulings some time after the sentence.

The document released on Thursday said evidence showed Berlusconi managed the scheme, in which he is accused of inflating the price paid for television rights to avoid taxes, for many years including when he was prime minister.

His involvement "continued despite the public roles undertaken", the document said, taking advantage of complicity both inside and outside the Mediaset group.

It rejected Berlusconi's argument that he had been too busy working in politics to be involved in such a plan, saying he still handled top-level Mediaset decisions, including the management of television rights.

It said Berlusconi had directly orchestrated the first stages of the evasion scheme, in which offshore companies were used to artificially inflate the price of film distribution rights, with part of the extra money skimmed off to create illegal slush funds.

The 76-year-old, whose mounting legal troubles include a separate trial on charges of paying for sex with a minor, headed four governments between 1994 and 2011.

Berlusconi is the head of the center-right People of Freedom party, part of Italy's fragile coalition government, giving him veto power over legislation and the ability to bring the government down in parliament.

Neither the four-year jail sentence nor a five-year ban on public office also handed down will take effect unless the conviction is upheld in a final appeal.

Berlusconi denies wrongdoing and says he is the victim of prosecutors and judges who are politically opposed to him.

(Reporting by Sara Rossi; Writing by Naomi O'Leary; Editing by Michael Roddy)