YACHTS AND TAX EVASION. 4-YEAR PRISON TERM ASKED FOR FLAVIO BRIATORE

During the appeal process against the Italian tycoon Flavio Briatore charged with suspected tax evasion, Prosecutor General Giuseppa Geremia asked for a 4-year prison term for the businessman. It’s undoubtedly a much heavier sentence than the one-year-and-eleven-month suspended sentence inflicted by the judge at the first trial.

Flavio Briatore, one among the lead characters of both business community and Italian “Vita Smeralda“, is charged for tax fraud over the rental of luxury yacht “Force Blue” (formerly Big Roi), a 63-metre explorer launched by Royal Denship in 2002 and rebaptised by the Italian manager in 2006 ( it is no coincidence that the initials of the boat are the same than his name: FB).

The yacht was seized by financial police in May 2010 while Briatore’s wife Elisabetta Gregoraci and their infant were on board. Promptly reported by all the Italian newspapers and media of the time, the police operation was carried out off the Ligurian city of La Spezia and immediately caused great controversy.

“I used the yacht only for rental purposes. I’m not a tax evader, I thought everything was ok. If I had been required to pay taxes by the Italian financial police, I would have done it with no problems“, Briatore said to preliminary hearing judge Nadia Magrini.

The businessman and former F1 team manager of Cuneo is not the only person involved in the affair. After Prosecutor General Geremia and public prosecutors Patrizia Petruzziello and Walter Cotugno’s charges, further imprisonment requests have been filed for both the captain of the yacht and the administrators of Autumn Sailing Ltd, the owner’s company. More specifically: three years and eight months for Ferdinando Tarquini, the captain of Force Blue yacht, who had received the same sentence than Briatore after the first trial; two years and six months for Dominique Warluzel (one-year-and-eleven-month suspended sentence had already been decided during the first trial) and two years for Maria Pia De Fusco, already sentenced to pay a fine of seven million euros.

The reason for the action and subsequent charge was the accusation that Briatore used the yacht for recreational, instead of commercial, purposes in Italy’s territorial waters between 2006 and 2010. According to prosecutors, Briatore wouldn’t have paid the appropriate amount of taxes on the fuel used by the yacht. As for charter activities, in fact, fuel benefits from a considerable excise duty reduction which makes it 50% less expensive than usual. Furthermore, Briatore would have registered the yacht to a charter company in a tax haven and the company would have enjoyed a number of tax breaks that would not have been eligible for a single owner and personal use.

Only no-paid VAT indeed requires a payment of 3.6 million euros.

Prosecutors have also asked the court to charge Briatore with transnational crimes since he could have worked with foreign partners as well as the requisition of the yacht. The trial will continue next May 30th.