Domenico Dolce and Stefano Gabbana could be facing a fine of $1.2 million. The designers’ finances have come under investigation following the sale of the Dolce and Gabbana and D and G brands to their Luxemburg-based company Gado Sri. Italy’s excise and revenue police have now confirmed their recommendation is for the duo to be charged with tax evasion and abuse of rights and suggested the massive fine.

Investigators allege Gado is a legal entity set up to avoid higher tax rates in Italy, but the duo insist they have paid all taxes relating to the sale and that figures mentioned by the police are “completely abstract”. The designers said: “We will tell the 3,800 employees of the companies, which compose the group, that we have paid all that was due and that we will strenuously defend ourselves to avoid being unjustly forced to pay for something that never existed in the first place. This higher taxable sum is a virtual figure we have never received, the result of a theoretical accounting exercise.”